We Gave the Grandkids Money — The Florida Medicaid Look Back Explained

In this article

1. Rule out the common misunderstanding first
2. How the penalty is calculated
3. When the clock starts
4. What can undo or avoid a penalty
5. What to do this week
6. The part that works against us
7. What the federal rules say

If you gave money to your children or grandchildren in the last five years and a parent now needs Medicaid to pay for assisted living, Florida will almost certainly find it, count it, and delay long term care coverage for a period of time that depends on how much was given. Florida looks back 60 months from the date of the application, adds up every gift or below value sale in that window, and divides the total by what a month of private nursing home care costs in the state. The answer is the number of months Medicaid will not pay.

Rule out the common misunderstanding first

Families often believe a gift is safe if it is small, or if it went to a grandchild for school, or if it was a gift every year at the holidays. Florida does not draw those lines in its rule. Under Florida Administrative Code 65A-1.712, when an applicant, a spouse, or a legal representative disposes of resources or income for less than fair market value inside the look back window, the Department of Children and Families must presume the transfer was made to become eligible for Medicaid.

That is a presumption, not a verdict. The state mails a notice that explains how to rebut it and how to ask for a hardship waiver. But the burden sits with the family, and a family that has no records is a family that loses the argument.

How the penalty is calculated

The same rule lays the arithmetic out in plain terms.

1. Every transfer inside the 60 months is added together into one total. Gifts, sales for less than they were worth, and money withdrawn by a joint account holder all count.
2. For a sale, the uncompensated value is what the asset was worth minus what was actually received.
3. The total is divided by the average monthly private pay nursing facility rate the state uses at the time of application.
4. The result is the length of the penalty. Fractions are not rounded down, so the state counts it to the day.

The rule says there is no limit on the length of the period. It also says that once a penalty is imposed it continues even if your parent stops meeting the other requirements for long term care coverage.

When the clock starts

This is the part that surprises families most. For transfers made on or after November 1, 2007, the penalty begins on the latest of three dates: the day your parent is eligible for Medicaid and would be receiving institutional level care or home and community based services but for the penalty, the first day of the month in which the transfer happened, or the day after an existing penalty ends.

In practice, the second date is almost always in the past. So the penalty begins at the point where your parent has run out of money, applied, and qualified on everything else. That is why a gift made to protect savings tends to leave a family with no savings and no coverage at the same moment.

What can undo or avoid a penalty

Florida's rule lists the situations where no penalty is imposed, all drawn from federal law at 42 U.S.C. 1396p(c)(2). The ones that come up most:

• The transfer was for the sole benefit of a spouse, a blind or disabled child, or a disabled person under 65. The document has to be written so nobody else can benefit from the money, now or later.
• A court ordered the support. A court order against an institutionalized spouse to support the spouse at home is not penalized.
• You can prove the money moved for a reason unrelated to Medicaid. This takes evidence, such as dates, receipts, and a pattern that predates any care need.
• Everything is returned. If all of the transferred assets come back to your parent, the penalty is eliminated and eligibility is judged as though the transfer never happened.
• Undue hardship. The penalty can be waived if it would endanger your parent's life or health or deprive them of food, clothing, shelter, or other necessities. The family must show it has tried to reach the money first. The rule lets the facility where your parent lives ask for the waiver, with your parent's or representative's consent.

Most families will not fit cleanly into any of these, which is exactly why the next section matters.

What to do this week

Move in this order. The first two steps cost nothing and protect the most.

The Senior Legal Helpline and the Elder Helpline are listed on the Florida Department of Elder Affairs website, which is the place to confirm either number before you dial.

The part that works against us

Sugarmill Manor and The Gardens both accept Medicaid. That does not pay for a penalty period. While Medicaid is withholding long term care payment, the monthly bill is the family's, and no community can make that disappear. A family facing a penalty has to plan for the bills in those months, and the most useful thing a community can do is tell you plainly what a month costs and how admission works.

We would rather explain that on the phone than have you find out after a move. If you are not sure whether the gifts you made count, call either community and we will walk through what to gather. We are not attorneys and will say so, but we can tell you what to gather before you see one.

What the federal rules say

The federal framework behind Florida's rule is the Deficit Reduction Act of 2005, which extended the look back from three years to five and moved the start of the penalty to the point of eligibility. The Centers for Medicare and Medicaid Services summarized the change in its transfer of assets backgrounder for state policymakers. Florida applies the same structure through the rule cited above, and the Department of Children and Families runs the eligibility process. Its public assistance information is at myflfamilies.com.

For how spend down works once the gifts are sorted out, our guide to Medicaid spend down for assisted living in Florida covers what the state counts and what a spouse at home can keep. If you are comparing what Medicaid acceptance means across Citrus County communities, start with our page on assisted living that accepts Medicaid.

Frequently asked questions

How far back does Florida Medicaid look at gifts?

Sixty months. Any transfer for less than fair market value made inside the five years before the application is added up and can delay Medicaid payment for long term care.

Can I give my children money before applying for Medicaid in Florida?

Gifts inside the 60 month window create a penalty period. The state presumes they were made to qualify, and the family has to rebut that with proof or use an exception.

How does Florida calculate the Medicaid penalty period?

The total value of all transfers is divided by the average monthly private pay nursing facility rate the state uses at application. Fractions are counted to the day, and the rule sets no maximum length.

Does returning the money cancel the penalty?

Yes, if all of the transferred assets are returned to the applicant, the penalty is eliminated and eligibility is decided as though the transfer never happened.

Does Medicaid pay for assisted living during a penalty period?

No. Long term care payment is withheld for the penalty months, so the family covers those bills. Sugarmill Manor and The Gardens accept Medicaid but cannot pay the penalty months.

Sources

• Florida Administrative Code 65A-1.712, SSI related Medicaid resource eligibility
• CMS, transfer of assets under the Deficit Reduction Act
• Florida Department of Children and Families, public assistance
• Florida Department of Elder Affairs, contact and Elder Helpline

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Written by

Cameron Hernando Clark

Community Relations Director

Cameron Hernando Clark is the Community Relations Director for The Manors of Citrus. He writes this family guide to help Citrus County families make sense of assisted living and memory care, drawing on the day to day of running two family owned communities on Florida's Nature Coast.