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What is the Medicaid 5 Year Look Back?

There are many “urban legends” which create much confusion and misinformation regarding the Medicaid 5 year look back.  The result frequently being that clients believe that they are not able to protect their assets and/or receive the long term care services they may require. 

The 5 year lookback refers to 60 months period prior to an individual’s need for Medicaid Nursing Home benefits.  In order to apply for Medicaid Nursing Home care, you must provide Medicaid with information and documentation related to the applicant’s and applicant’s spouse’s finances for the 60 months prior to the request for nursing home benefits.  This in itself should not pose any issues for a Medicaid applicant presuming they may obtain the documentation from their financial institutions.  However, Medicaid has a transfer penalty rule which states in part that any uncompensated transfers (gifts or transfers of assets for less than fair market value) will be penalized.  The penalty for such uncompensated transfers is a period of time that Medicaid will not cover the costs of the nursing home care for the applicant. An experienced elder law attorney will be able to review your financial history and advise of any potential uncompensated transfers regarding eligibility and in many cases propose possible solutions to any issues uncovered in the 5 year lookback.  

Additionally, it is important to remember the following additional points: 1) The five  year lookback does not apply to Medicaid community based Home Care benefits; 2) There are many exceptions to the transfer penalty rules and ways to protect assets even if nursing home care may be needed within five years of engaging in asset protection planning; 3) It is important to review each situation on a case by case basis – one person’s asset protection plan will not always look the same as another’s – it is important to speak with an experienced elder law attorney to determine the best plan for you and your family. 

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