The Medicaid 5-Year Look Back Period Explained

There is nothing in Medicaid Law that causes more confusion than the 5-Year Look Back Period.

Many people mistakenly believe that you can’t do any planning within 5 years of needing care. This isn’t exactly true. Here’s how the Look Back Period Works:
If you go into a nursing home and want to apply for Medicaid benefits to pay the bill, you must be below the low asset thresholds. Many families try to transfer assets to their children so that they can qualify without spending all of their money on care. However, when you apply for Medicaid, you must report any assets that you have gifted during the last 5 years.
If you have made gifts, the state will impose a penalty period, during which time Medicaid will not pay your nursing home bill. The length of the penalty period depends on the amount of the gift.

This is a problem because the nursing home is providing needed care and they deserve to be paid. But if you aren’t eligible for Medicaid because you gave away your assets, then no one is paying their bill. This could force the nursing home to sue your children for payment.
If your family has already made gifts, there are ways to fix the problem. There are also less risky options for Medicaid eligibility planning. While gifting during the 5-Year Look Back Period can be problematic, there are several other options available to protect assets, even after someone is in the nursing home.
To learn more, consider attending one of our complimentary Elder Law Workshops. Register on our website at www.sechlerlawfirm.com/workshops/ or call my office at 724-841-1393 to schedule an initial consultation.

Editor’s Note: This article was written by Tim Sechler, Esq., a Certified Elder Law Attorney and Principal of Sechler Law Firm, LLC.