Medicaid Planning: The “Five Year Look Back” What Does it Mean for You?

Ron Kearns, Esquire, R.N.

December 15, 2010

Sometimes a few seconds can feel like they last an eternity, and yet ten years passes in the blink of an eye. Before you know it, you are looking at retirement and beyond. Those questions about how to protect your assets as you get older, the questions that you never thought would be important to you, are now always on your mind.

Medicaid eligibility requirements can be a little bit confusing, especially the regulations around the “Five Year Look Back”. This provision was written into the law in February of 2006 and can have serious consequences if you need to apply for Medicaid benefits in a nursing home. The Five Year Look Back can seriously impact your long term care and financial planning in the following ways:

• If you give one of your children a gift within 5 years of entering a nursing home, you will most likely be ineligible for Medicaid unless you get the gift back. This is called “curing” the gift. It is generally not too popular with the children who have received the gift because they may already have spent it on home renovations or education for your grandchildren.
• Even more egregious than the Five Year Look Back is that the penalty period (time ineligible to receive Medicaid benefits because of the gift) starts when you enter a nursing home. No matter how small or large the gift is you still will be ineligible for Medicaid benefits unless the gift is cured or unless you “make” it past the Five Year Look Back period.

On a positive note, you may be eligible for certain exemptions such as the adult child caregiver exemption which protects your family home. According to this rule, if your adult child lives in the home and has taken care of you for the past 2 years, thus keeping you out of a nursing home, your home would be exempt from a Medicaid lien. In other words, you could keep the home and it cannot be attached by Medicaid to pay for nursing home expenses.
Five years is a long time. It is difficult to predict exactly what your needs are going to be. The best way to protect your assets from a nursing home is to avoid going into a nursing home. The staff at Senior Resource Center can show the alternatives, including community services, care at home, assisted living and support from Veterans programs.

In addition, it is now more important then ever to do early planning to protect your hard earned assets in the event that nursing home care cannot be avoided.

The professional staff at Senior Resource Center is uniquely qualified to help you examine your overall care/financial/legal* situation and help to create a long range plan that is just right for you. If you, or anyone you know, have questions or concerns about Medicaid eligibility, Asset Preservation and Estate Planning, we urge you to call us and take advantage of our complimentary 90 minute consultation.

*Senior Resource Center, Inc. (SRC) is not a law firm, but is affiliated with Falco & Associates, P.C. SRC provides a legal overview of potential legal issues and may make a referral to Falco & Associates, P.C. or a law firm of the individual’s choice if legal work is necessary. Services provided by SRC are not legal services and the protections of the lawyer-client relationship do not exist with regards to these services. Senior Resource Center, Inc. (SRC) and its employees are not registered investment advisors, nor do we offer or sell securities.