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Recognizing the Medicaid look-back period

Recognizing the Medicaid look-back period

If you are trying to figure out how to qualify for Medicaid, you may have heard of the Medicaid look-back period. It’s tough to determine what’s vital when you’re bombarded with health, financial, and insurance information. A fundamental Medicaid factor is the look-back period. It becomes important when you evaluate your need for long-term care and prepare for the expenditures. A Medicaid planning attorney may assist you in developing and implementing a strategy. You have the ability to address this critical problem before it jeopardizes your assets at the worst conceivable moment. You should speak with a Medicaid planning lawyer who specializes in Medicaid planning so that we may explore Medicaid-planning alternatives that avoid the look-back period legally and morally.

How does the Medicaid look-back period work?

When a person needs help paying for long-term care, Medicaid, assesses and evaluates their assets and resources. They examine transactions made up to five years before the date of their application for help. If the study indicates that an applicant disposed of their assets, they face penalties based on the total amount of all assets donated or transferred for less than fair market value throughout the 5-year period.

What kind of assets or resource transactions violate Medicaid rules?

The individual examining a prospective Medicaid beneficiary’s financial transactions looks for the assets and resources listed below.

  • Gifts: Cash, personal goods (cars, jewelry, artwork, and so on), or real estate given like a present
  • Selling a personal or real property for less than its fair market worth.
  • Personal or real estate that has been transferred to another owner (certain exceptions apply for live-in siblings and children who provided significant care for the Medicaid applicant)
  • Pensions (treated as the disposal of an asset for less than fair market value)

How do retrospective penalties work?

If an applicant gives, transfers, or sells assets for less than their market worth, the value of such unlawfully disposed assets is used to calculate the penalty. The cost of care services is also included when determining the penalty. It’s a straightforward mathematical issue. You compute the value of assets sold during the look-back period. You divide the entire asset worth by the average monthly cost of nursing home care. The punishment is the answer. It is the number of months that a Medicare applicant will be denied benefits.

Exceptions to the rules on assets and resources

Certain asset transfers do not result in a penalty for the individual seeking Medicaid treatment. Here are a few examples of such exclusions.

  • A residence that has been transferred to a spouse, a kid under the age of 21, or a child who is blind or permanently and fully incapacitated.
  • A residence is transferred to a sibling who has an equity stake in the property and has lived in it for at least one year.
  • A child of the Medicaid applicant who has lived in the house for two years (known as the child-caregiver exception) (note, this is a very high standard to overcome).
  • Transferred assets for the exclusive benefit of a person’s spouse
  • If imposing a punishment will create excessive hardship, it should be avoided (note, this is a very high standard to overcome).

Make contact with a Medicaid planning attorney

The good news is that you can avoid Medicaid look-back fines with appropriate preparation, and you don’t have to wait five years to qualify for Medicaid. However, careful planning and preparation are required. Medicaid planning tools may assist you both before and after the Medicaid application process becomes urgent. We assist you in comprehending complicated Medicaid legislation. Our experts will take the time to discuss your options and weigh the benefits and drawbacks of any techniques that will help you keep more of your assets. Please contact us as soon as possible to book a consultation.

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