I want to know when to file for Medicaid to avoid penalties for look back rules?
When should my grandmother file for Medicaid to avoid look back penalties for recent gifting? She will need to file for Medicaid soon due to spending down her assets. Unfortunately, she has gifted out some money prior to knowing about the look back periods and ineligibility time. Our question is, since some of the gifting happened prior to the February 2006 ruling, is that part of the gifting subject to the three year look back rules where as anything after that is subject to the five year look back rules? The answer will drastically change her ineligibility period.
Expert Answer
That's right, the key is the date the gift was made. But the rule only applies if she is applying for Medicaid coverage of residence in a nursing home or assisted living facility. There's no look-back rule at all if she's just applying for Medicaid coverage of her medical care while she remains at home.
So, regarding nursing home or assisted living coverage, for anything she gifted before February 8, 2006, the look-back period is 3 years from the date she applies for Medicaid. If she applies for Medicaid more than three years after the gift, that money will not be counted as part of her assets and there will be no penalty (for those amounts).
For any gift made on February 8, 2006 or later, the look-back rule is 5 years. And if Medicaid determines that there was an invalid transfer within that period, the penalty it will impose -- ineligibility for coverage -- will run from the date of her application for Medicaid (not from the date of the gift).