The Look-Back Period: What it Means for You
Nursing home care is expensive. The median cost of a double-occupancy, semi-private room in New York nursing homes is close to twelve thousand dollars per month. It does not take long for the bills to add up, and soon a person’s life savings disappears, along with the intended inheritance to their children and grandchildren.
As a result, many seniors try to qualify for Medicaid to avoid spending their life savings on high nursing home care costs. If they have too many assets to qualify, the obvious solution would seem to be giving away those assets to someone else, such as children, a spouse, or friends.
Medicaid does not have enough money, however, to cover everyone who wants to protect their assets from being consumed by nursing home costs. To prevent these transfers, New York and Federal law designates a look-back period. This means that when someone applies for Medicaid to pay for nursing home costs, Medicaid looks back into the financial history of the applicant and penalizes those who have made certain transfers within the past five years from the time a Medicaid application is filed.
The penalty makes the applicant ineligible to receive Medicaid payments for a period of months based upon the value of the assets that the applicant transferred and the average monthly cost of nursing home care in the applicant’s region. In New York City in 2012 the cost was set at $11,350.
If a Medicaid applicant is seeking benefits for home care in one’s own home, the current look-back period is only one month. Assets transferred before that do not create a penalty or delay the receipt of Medicaid benefits.
Even with the five-year look-back period for nursing home benefits, there are exceptions. Certain transfers to specific beneficiaries are permitted and do not trigger a penalty. It is important to consult with an experienced Medicaid planning attorney to discover your options and to protect your assets.