Beginning April 1, 2024, the State of New Jersey will increase the Medicaid penalty divisor to $440.10 per day, as compared to the previous penalty divisor of $384.57 in 2023. See Medicaid Communication No. 24-03.

The Medicaid divisor is used to determine the period of ineligibility for individuals and couples who have transferred assets for less than fair market value during the (5) year Medicaid lookback period. The penalty divisor is intended to represent the average monthly cost of nursing home care in New Jersey.

For example, if an individual transferred (or gifted) $100,000 during the five (5) year lookback period, Medicaid divides the transferred amount by the current penalty divisor ($100,000 / $440.10), resulting in an ineligibility (“penalty”) period of approximately 7 ½ months. The ineligibility period begins on the day the Medicaid applicant is determined to be “otherwise eligible” for benefits.  To be “otherwise eligible,” Medicaid applicants not only need to meet the financial criteria, but also need to demonstrate medical need, which is determined through the “pre-admission screening” process.