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ForwardHealth for the Elderly, Blind or Disabled
Divestment
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Divestment
Printable Version PDF (English, Hmong,
Spanish) (10 KB)
Divestment is giving away one’s resources, such as
income, non-exempt assets and property for less than fair market value in order
to enroll in ForwardHealth for Elderly, Blind or Disabled (EBD).
Divestment is also an action taken to avoid receiving income or assets
that one is entitled to receive. For
example, waiving pension income or disclaiming
an inheritance.
Note:
Fair market value is
an estimate of the price an asset could have been sold for on the open market at
the time it was given away.
When
applying for ForwardHealth for Elderly, Blind or Disabled (EBD),
“Divestment” is important if:
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You are
living in or entering a nursing home or hospital for a stay of 30 days or
more.
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You are
applying for ForwardHealth EBD — Community Waivers Program.
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You are
applying for ForwardHealth EBD — Family Care.
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You are
applying for ForwardHealth EBD — PACE or Partnership.
The “divestment
penalty period”
A divestment penalty period is a period of time when
ForwardHealth EBD will not pay for nursing home care or long term care benefits
through the Community Waivers Program, Pace, Partnership, or Family Care.
Persons may still be able to get limited ForwardHealth
EBD card services during the divestment penalty period.
Divestment penalty
period and how it is calculated
When you apply, you will be asked whether any financial
resources have been transferred to another person within the past 36 months (60
months for trust funds). If you
transferred financial resources during this time period, and did not receive
fair market value for your transfers, a divestment penalty period will be
calculated.
Divestments that
occurred prior to January 1, 2009
A divestment penalty period is calculated based on:
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Value of transferred resources,
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Date the divestment occurred,
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Date of application or date of entry into an
institution, and
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Current average monthly private nursing home rate.
Example:
On January 1, 2008, John Smith transferred $84,486 in cash, CDs and stocks to
the American Red Cross. On July 30, 2008, he is admitted to a nursing home and
applies for ForwardHealth EBD. Because
he transferred these assets within 36 months of applying for ForwardHealth EBD,
a divestment penalty period will be determined. The months of the Divestment
penalty period are determined by dividing the divested amount ($84,486) by the
current monthly average private nursing home rate ($6,259), which would be
13.49. John Smith is not able to
enroll in Institutional ForwardHealth EBD from January 2008 through January
2009.
Divestments that
occurred on or after January 1, 2009
A divestment penalty period is calculated based on:
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Value of transferred resources
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The date on which the individual is institutionalized
(or requesting Community Waivers, Family Care, PACE, or Partnership), has
applied for ForwardHealth EBD, and is otherwise able to enroll in
ForwardHealth EBD but for the imposition of the divestment penalty period
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Current average daily private nursing home rate
Example: Jane
divested $20,000 on January 15, 2009. She
was admitted to a nursing home, applied for Institutional ForwardHealth EBD on
January 20, 2009 and was able to enroll in ForwardHealth EBD.
The average daily cost of nursing home care is $205.77 so the calculated
penalty period for the divestment is 97 days ($20,000 divided by 205.77 =
97.19). Partial days in which Jane
is not able to get benefits will be rounded down (97.19 days is rounded down to
97 days). The penalty period runs
from January 20, 2009 through April 26, 2009 (12 days in January, 28
days in February, 31 days in March, and 26 days in April).
On April 27, ForwardHealth EBD will begin to pay for the cost of Jane’s
institutional care.
For More
Information:
Information
provided in this document is general. To
find out more detailed information, contact your local county or tribal agency.
The Department of
Health Services is an equal opportunity employer and service provider.
If you have a disability and need to access this information in an
alternate format, or need it translated to another language, please call (608)
266-3356 or 1-888-701-1251 (TTY). All
translation services are free of charge.
For civil rights
questions, call (608) 266-9372 or 1-888-701-1251 (TTY).
P-10058 (01/09)
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