WHAT IS THE FIVE-YEAR MEDICAID LOOK-BACK?

As you get older, you may begin to think long and hard about the eventualities of aging. When you look at the statistics, you will find that most American senior citizens will need help with their day-to-day needs eventually. Long-term care is very expensive, and Medicare does not pay for custodial care. Medicaid is a government program that will assist with these expenses.

Need-Based Health Insurance

Unlike Medicare, Medicaid is a need-based health insurance program. Your assets and income must stay within certain limits if you want to qualify for Medicaid to pay for living assistance.

A logical thought would be that you could simply give your assets to your family members who would otherwise be inheriting these resources if you find out that you need to enter a nursing home or assisted living community. You could then qualify for Medicaid.

In reality, this is not possible because of the five-year Medicaid look-back period. When you apply for the program, eligibility evaluators will examine your financial transactions going back five years. If they find that you have given away assets within five years of submitting your application for Medicaid coverage, you will be deemed ineligible for a period of time.

The exact duration of this penalty will be calculated by comparing the cost of long-term care in the state of New York to the amount of the divestitures.

Advance Planning Is Key

Sticking your head in the sand as you hope for the best is probably not an effective strategy when you consider the fact that 70 percent of people turning 65 will indeed require long-term care. It is likely that you will need living assistance, and long-term care is very expensive.

The costs have been steadily rising, but at the present time a room in a nursing home in the state of New York comes with an annual price tag that exceeds $137,000. About 10 percent of the people who reside in nursing homes remain in the homes for a minimum of five years.

If you plan ahead in advance with future Medicaid eligibility in mind, you can potentially position your assets optimally at least five years before you apply for coverage.

Free Medicaid Planning Special Report

There is a lot to take into consideration if you are interested in Medicaid coverage as a senior citizen. The program rules are complex, and you have to do some research to understand the details.

Our firm has prepared a free special report that takes an in-depth look at Medicaid planning for those who are concerned about future long-term care costs. The report can be accessed through this website. To obtain your copy of the report, click this link and follow the simple instructions: Free Special Report on Medicaid Planning.