Understanding the “Five Year Look Back” Medicaid Provision

Posted by Ernest P. Valliere on September 02, 2013

Adapted from an article by Ron Kearns, Esq., RN

Did you know that a financial gift your parents give you might affect their Medicaid eligibility? The Medicaid “Five Year Look Back” provision, added in February 2006, can have a serious impact on your family’s long-term care and financial planning if your parent or another loved one needs to apply for Medicaid benefits in a nursing home.

If your parent has given you a gift within five years of entering a nursing home, he or she will most likely be ineligible for Medicaid unless he or she takes the gift back. This is called “curing” the gift. This can be difficult since you may already have spent it on home renovations or education for your children.

The penalty period for a gift—the time your parent is ineligible to receive Medicaid benefits because of the gift—starts when he or she enters a nursing home. No matter how small or large the gift is, your parent will still be ineligible for Medicaid benefits unless the gift is cured or until five years have passed.

On a positive note, your parent may still be eligible for exemptions, including the adult child caregiver exemption, which protects the family home. According to this rule, if you live in your parent’s home, have taken care of him or her for the past two years, and have kept him or her out of a nursing home, the home is exempt from a Medicaid lien. Your parent can keep the home, and it can’t be used by Medicaid to pay for nursing home expenses.

Five years is a long time. The best way to protect your parents’ assets is to help them avoid going into a nursing home as long as possible. Senior Resource Center is an SBLI partner that can help you explore alternatives, including community services, care at home, assisted living, and support from veterans programs.

It’s also critical that your family be proactive in protecting your parents’ hard-earned assets in the event they need nursing home care. The professional staff at Senior Resource Center is uniquely qualified to help you examine their overall care, navigate financial and legal* situations, and help create a long-range plan.

If you or someone you know has questions or concerns about Medicaid eligibility, asset preservation, and estate planning, contact SRC to schedule a 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.

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