Medicaid’s five-year look-back program

On Behalf of | Nov 21, 2023 | Medicaid Planning And Asset Protection |

Medicaid is a program designed to assist elderly individuals with low incomes in paying for medical expenses. When a senior applies for the program, Medicaid conducts a five-year look-back or analysis. Applicants must meet strict eligibility criteria, which will be reviewed during the five-year assessment.

Before seniors begin the process of applying for Medicaid, they sometimes discover that they must spend down some of their money to be eligible for services. But they have to be careful not to try to manufacture a need where none actually exists.

Sometimes Medicaid imposes penalties

During the five-year look-back period, Medicaid checks for ways in which you might have spent money that could have been used to help with your current medical care. When a senior is found eligible for Medicaid but has made financial gifts to family members within the five years prior, Medicaid prohibits them from receiving benefits for a certain period. This period is known as the “Medicaid penalty period”.

Let’s say a senior applicant gave their grandchild $10,000 four years ago, Medicaid may temporarily penalize the applicant. This is because Medicaid assumes that the senior applicant could have used the $10,000 to pay for medical expenses if that money had been available. Although Medicaid benefits may still be granted, there will be a penalty that delays the start date of the coverage.

What does this mean for senior Medicaid applicants?

Essentially, if your application is accepted but there is a penalty term you may have to pay for your nursing home or medical care out of pocket until the penalty period expires 

The Medicaid look-back period can be complicated, and seniors must think ahead. Legal guidance can help seniors take a strategic approach so that their assets don’t get in the way of their care.