Before we provide an explanation of the Medicaid look-back, we should explain why Medicaid should be on your radar if you are going to qualify for Medicare coverage at the age of 65.
It is true that Medicaid and Medicare are both government run health insurance programs. If you qualify for Medicare when you attain senior citizen status, you would not need Medicaid. Plus, you probably would not qualify, because Medicaid is only available to people with very limited resources. There is an upper asset limit of $2000 for an individual in most states.
However, the reason why Medicaid may be relevant to you is because Medicare does not pay for long-term care. Approximately 70 percent of people who are reaching the age of 65 will eventually need living assistance according to a government agency, so this is something that you should take seriously when you are looking ahead toward the future.
Nursing homes are very expensive, and paying out-of-pocket could consume everything that you intended to leave behind to your loved ones. Fortunately, Medicaid does pay for long-term care, and it pays for most of the long-term care that seniors are receiving.
Medicaid Look-Back Period
To stay within this $2000 asset limit, people often give assets to their loved ones before they apply. This can be done, but you have to plan ahead in advance if you want to qualify for Medicaid at the ideal time. This is because of the fact that there is a five-year look-back period.
The Medicaid program does not want people to find out that they need long-term care on Monday and give away their assets on Tuesday. This is why the look-back was installed. If you give away assets within five years of applying for the program, your eligibility is delayed, and you have to pay out-of-pocket during this interim.
The exact duration of the penalty will depend upon the amount of the divestitures. To provide an example, let’s say that you gave away enough to pay for 18 months of nursing home care years before you applied for Medicaid.
Since the money would have been given away within this five-year window, you would be penalized. The amount that you gave away would have payed for 18 months of care, so your eligibility would be delayed for 18 months.
Free Report on Medicaid Planning
You should certainly understand the Medicaid rules and regulations thoroughly if you are looking ahead toward the future with long-term care costs in mind. As you may imagine, these rules are complex, but if you act in an intelligent and informed manner, you may be able to qualify for Medicaid at the ideal time without losing much in the process.
We have prepared a special report that will provide you with a lot of great information about Medicaid. To get your copy of the report, visit this page: Dallas TX Medicaid Planning.