Medicaid is a federal benefit program that can be used to help cover long-term care costs for senior citizens who need skilled care in their own homes or require a stay in a nursing home or skilled care facility. While Medicaid is a widely used program here in Florida and across the United States there are actually some pitfalls that could prevent seniors from getting benefits, which is why it’s so important to work with an elder law attorney before the senior needs a significant level of care.
The reason? Medicaid eligibility is dependent on strict income and asset requirements. Medicaid eligibility also includes a five-year look-back period that examines the senior’s financial situation. Any transfer of money or purchase that was made during those five years is examined, and anything that looks suspicious (perhaps a large wedding gift to a grandchild) can result in a penalty period ranging from a few months to a few years before a senior can access benefits.
Navigating the look-back period can be tricky, and elder attorneys devote their entire careers to helping seniors with this specific process. Here are some general tips though that we advise seniors and their loved ones to be aware of:
Be Careful About Asset Transfers
When it comes to Medicaid eligibility, asset limits ensure that people who are truly in need can receive benefits. Many people think that assets can simply be transferred from a senior to another person so they can then qualify for Medicaid. This strategy actually causes more problems for the senior if those transfers are made within five years of the Medicaid application. Again, every financial transaction that occurs during this period is carefully examined by the Medicaid agency to determine eligibility and may lead to eligibility disqualification, however…
There Are Always Exceptions to the Rule
There are exceptions that exist for financial transfers and Medicaid eligibility. Some assets are exempt in certain cases, such as a car or house, while payments made to family members who have provided health care services at home within the last five years are also exempt. Strategies to spend down money on home and health care costs are also not counted towards Medicaid eligibility. However, any spend-down strategy should be discussed with an experienced elder law attorney to ensure there are no issues.
Beware the Penalty Period
If the Medicaid agency finds out that non-qualified transfers (i.e., any transfers besides the ones listed above) were made within the five years before the Medicaid application, a penalty period may be levied. The penalty period depends on the dollar amount of the transfer(s) and the average monthly cost of care.
My Loved One Needs Benefits…But We’re Afraid to Make a Mistake!
When it comes to applying for Medicaid benefits to cover the cost of long-term care, the single best way to avoid penalties and problems during the look-back period and ensure you’re eligible for Medicaid coverage is to find an experienced elder law attorney who knows the ins-and-outs of Medicaid law. Your attorney will help to review all transfers during the look-back period to see what may (or may not) be a problem, while also helping to reallocate assets or utilize “non-countable” expenses to help seniors legally fall within Medicaid’s income and asset guidelines.
If you would like to learn more about Medicaid eligibility and how the five-year look-back period works, please contact us at (813) 438-8503 to schedule a complimentary initial consultation.