What is a Medicaid “But For” Letter?

We talked last week about New Jersey’s Medicaid transfer penalty, but what exactly is a “but for” letter?  As I explained , the Medicaid penalty doesn’t start when the transfer of assets is made, but only after the other requirements are met, meaning the application is filed and all the other Medicaid requirements are met.   A “but for” letter is the written communication from New Jersey Medicaid stating that but for the transfer penalty you would have been eligible to receive benefits.  It tells you exactly when the penalty starts and how long it will be.  The State will not pay for your care during the time frame of the penalty.  You’ll need to find other means to pay for the care.