Medicaid coverage is one of the best federal benefit programs available for seniors in need of skilled care in the home or in a skilled nursing care center. However, Medicaid eligibility has strict income and asset requirements. While many seniors may meet those requirements at the time they need the care, Medicaid imposes a five-year lookback period that examines the senior’s financial situation during the previous five years. If certain transfers or purchases were made during that time period, the senior may be subjected to a penalty period before they can receive Medicaid benefits. The following are three things you need to know about the Medicaid lookback period.
Asset Transfers Can Cause Problems
Asset limits are a part of Medicaid eligibility to ensure that people who cannot afford to pay for their care can receive those benefits. A common misconception about Medicaid eligibility planning is that assets can be transferred out of the senior’s name to meet the asset limit. This strategy will actually cause more problems for the senior if they are made within five years of the Medicaid application. The benefits agency examines every financial transaction made during that period to determine eligibility. This review could lead to disqualification.
Penalty Periods May Be Assessed
If the benefits agency finds that non-qualified transfers were made within the five years before the Medicaid application, a penalty period could be assessed against the applicant. The penalty period depends on the amount of transfer and the average monthly cost of care.
There Are Exceptions in Certain Cases
There are certain exceptions to the rules regarding penalty periods and financial transfers. Certain assets may be exempt, and transfers made to family members who have provided health care services within the home over the last five years are a common exception. In addition, strategies to spend down money on home and health care costs are not counted toward Medicaid eligibility.
If you would like to learn more about how Medicaid eligibility is impacted by the five-year look back period, or if you’re currently planning to qualify a loved one for Medicaid eligibility and would like some advice, please contact our office at 877-653-3450 to schedule a complimentary initial consultation.