How Far Does Medicaid Look Back at Someone's Assets?
How far does Medicaid look back at someone's transfer of assets?
Medicaid rules look back either three years or five years, depending on the date that the transfers were made. The Medicaid "look-back" rules have to do with whether giving away assets, or transferring them for less than full value, will disqualify someone from Medicaid coverage of his or her nursing home costs. (The rule does not apply to Medicaid coverage of regular medical costs or of in-home care.)
Here are the rules: To qualify for Medicaid nursing home coverage, the person must have very low income and assets. Medicaid will look at any transfer of assets the person has made in the previous years. If assets have been given away, or transferred for less than full value, during a "look-back" period before applying for Medicaid, the person may be ineligible for Medicaid nursing home coverage for some period of time. The length of ineligibility is calculated by taking the value of the transferred asset and dividing it by the average monthly nursing facility cost in the state where the person lives.
The look-back periods are different in length, and in severity of penalty, depending on when the gift or transfer was made.
- For gifts or transfers made before February 8, 2006, the look-back period is 36 months previous to the date the person applies for Medicaid nursing home coverage. If the gift or transfer fell within this time, the period of ineligibility begins to run starting from the date of the transfer.
- For gifts or transfers made on or after February 8, 2006, the rules are much tougher. The look-back period for transfers made starting from this date is 60 months previous to the date of the person's Medicaid application. And if a less-than-full-value transfer fell within this time, the period of ineligibility begins from the date of the application for Medicaid coverage (*not* from the date of the transfer, as under the first rule).
For further explanation of these rules, and for possible ways to protect some assets, go to Elder Law Answers.
In addition to that, the transfer or selling of an asset is based on the fair market value and the penalty period is based depending on the cost of care in your state, so if you transfer or gift an asset worth $150,000 within the 5-year look back period, and the cost of care in your state is $75,000 per year, you will be penalized and will not qualify for medicaid for 2 years, which means for this period of time, you have to shoulder your long term care expenses (based on the sample computation at http://www.infolongtermcare.org/ltci-learning-center/what-is-long-term-care-insurance/government-long-term-care/). Medicaid will only pay your ltc expenses after 2years, not to mention that medicaid also has an asset-recovery procedure. So before doing anything foolish, it is highly advisable to talk to an elder care lawyer