How is New Jersey’s Medicaid Penalty Calculated?

In New Jersey, Medicaid calculates the transfer penalty as follows:  The total amount transferred for less than fair value in the five years immediately preceding the application divided by the average monthly cost of nursing home care in New Jersey.  The quotient is the number of months the Medicaid applicant is ineligible for Medicaid payment for long term care services. Each state has a different divisor because each state has a different average monthly cost of nursing home care.  As of December, 2012 New Jersey maintains that the average monthly cost of nursing home care in the state  is $7,757.  Unfortunately, that figure is unrealistically low.  Most residents in a New Jersey nursing home pay between $9,000 and $12,000 per month for care.  However, New Jersey claims this to be a statewide average.