What is the "look-back period" and asset limitations in order to qualify for Medicaid?

1 answer | Last updated: Sep 26, 2016
A fellow caregiver asked...

What is the "look-back period" and asset limitations in order to qualify for Medicaid by an elderly woman who is physically and mentally incapicitated being cared for in her daughter's home in New York State? How can the assets be disposed of if they are above the maximum Medicaid requrements? The daughter desperately needs assistance to care for her mother and Medicare will no longer cover any services.

Expert Answers

Barbara Steinberg is the CEO and founder of BLS Eldercare Financial Solutions, which specializes in helping families pay for long-term care for their loved ones. A registered financial gerontologist, she speaks regularly on the topic of paying for long-term care and is a financial expert for Caring.com.

In New York State, the look back period for nursing home (institutional) care is 5 years. This means that any assets that were given away (gifted) during the 5 year period prior to Medicaid eligibility can result in a penalty to the applicant. This penalty is a calculation based on how much was gifted and what the average monthly nursing home fee is where you live (it is different in different parts of the state). The penalty is the number of months the applicant must wait before Medicaid will begin to pay.

The rules are different for home care in New York State. There is a short look back, usually ranging from 1 to 3 months. The best way to find out what the timeframe is where you live is to get a Medicaid application from the county and see how many months of financial transactions they want to see. During that period, your mother's total assets need to be at or below the NY Medicaid threshold of $13,800 for a single person.

Assets can be moved out of your mother's name prior to the look back period and will not affect her eligibility. The catch comes in if your mother starts off with home care and needs to go to a nursing home before the 5 year look back period has passed. Although she qualified for Medicaid at home, she still has to meet the eligibility requirements for nursing home care when the time comes.

In most situations, the best way to move the assets is to set up an irrevocable trust and transfer the assets to the trust. The trust provides protection for the assets which can be used as needed for your mother's care.