In most states, the look-back period is five years, but there are a couple of exceptions.
How Medicaid Pays for Nursing Home Care
Long-term care in a nursing home can be expensive.
Nearly all Americans age 65 or older are covered byMedicare, which pays for medical treatment.
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But Medicare does not cover long-term care (assistance with daily living).
But to qualify for Medicaid if you’re 65 or older, there are both income and asset limits.
But if you’re 65 or older, Medicaid eligibility also depends on your assets/resources.
Not everything you own will necessarily count towards your Medicaid eligibility for long-term care.
It is important to understand what does and does not count.
They will count towards your income limit.
What assets should not be in a trust?
Discuss your circumstances with a tax advisor who specializes in elder law and asset management.
That is where theMedicaid look-back periodcomes into play.
New York is also working to switch to a 30-month look-back period for nursing home Medicaid as well.
If any assets were gifted, transferred, etc.
The more money that changed hands, the longer the waiting period.
It could take months or years to become eligible for Medicaid nursing home coverage.
This can be troublesome for anyone needing custodial care in the near future.
Revocable vs. Irrevocable Trusts
The strategy is to turn your countable assets into non-countable assets.
Some people look to trusts as a way to accomplish this goal.
Unfortunately, not all trusts are created equally.
you better understand the difference between a revocable and an irrevocable trust.
Medicaid will see this kind of trust as a countable asset.
You cannot touch the assets or amend provisions for the trust in any way.
The trustee is not required to distribute any assets to you, even for the purposes of health care.
The day your assets are transferred into an irrevocable trust, they become non-countable for Medicaid purposes.
Unfortunately, those assets are seen as a gift and are subject to the Medicaid look-back period.
Planning in advance, before you need nursing home care, provides the most advantages.
Upon your death, Medicaid reserves the right to recover funds paid on your behalf.
They can go after your remaining assets, even assets that were not initially countable, like your house.
One of the downsides of a MAPT is it can be a risky venture.
Summary
Medicaid planning can be very complicated.
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American Council on Aging.Understand Medicaids look-back period; penalties, exceptions & state variances.
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