Tennessee Medicaid: TennCare CHOICES Lookback vs Penalty Period

When a person applies for TennCare CHOICES, Tennessee’s Medicaid program, the State of Tennessee assesses that person’s financial eligibility for benefits.  If the person has sold or gifted property or assets for less than fair market value within a certain time prior to the date of application, they may not be able to immediately qualify for benefits.  There are two key terms to understand here:  the “lookback period” and the “penalty period.”The “lookback period” is the amount of time prior to the application for TennCare CHOICES that the State of Tennessee is allowed to examine transfers of assets/property to determine if any improper gifts were made. This period is currently 60 months, or five years. So if a woman applying for TennCare today made a generous monetary gift to her daughter four years ago, that gift would have consequences for the elder woman’s eligibility. TennCare usually only wants to look at three months of bank statements from a TennCare CHOICES applicant, but they have the right to request all 60 months if they so choose. They also require that the applicant sign the application under penalty of perjury, so that it becomes Medicaid fraud if the applicant does not disclose any gifts made during the lookback period.The penalty period is the amount of time that TennCare CHOICES will not pay for care because of a gift that was made during the lookback period. Currently, TennCare will not pay for one month of care for every $5,472 dollars* that a person gives away. It is important to note that the imposed penalty period will not begin until the applicant is “otherwise eligible” for TennCare, meaning that they meet every other requirement for TennCare.Sometimes “gifting” is not straightforward for TennCare/Medicaid purposes. What may seem like a fair trade or reimbursement to the applicant may be classified as a gift by TennCare if it isn’t executed carefully and according to TennCare/Medicaid guidelines. Avoid TennCare mistakes by consulting a qualified elder law attorney prior to filing an application – or, even better, prior to making any significant gifts or transfers of property or assets. Proper planning in advance can help you avoid costly delays in getting access to the benefits you need.*TennCare and Medicaid figures and calculations are subject to change over time.  This amount represents the calculation for year 2018.  When determining eligibility and calculating penalty periods, always make sure you are using the most recent TennCare/Medicaid standards.Image © Creative Commons Zero