What Medicaid Is Looking For In the 5-Year Lookback

Have you heard of the 5-year lookback?

Maybe you’ve never heard of the 5-year lookback in the context of Medicaid?

Applying for Medicaid for long-term care services such as nursing home care is a benefit many seniors believe is part of their Medicare benefits. However, that is a mistaken notion. Medicaid is a separate state and federal government program. It’s not affiliated with Medicare – a federal program for people over 65 years of age. However, seniors can apply for Medicaid long-term care services. But there is one important feature of applying that often causes many people to be denied. This is the 5-Year Lookback.

Medicaid is a program designed to assist with medical expenses for low-income individuals. Thus, the 5-year lookback period plays an essential role in preventing individuals from transferring assets to family members or others to become eligible for benefits.

The 5-year lookback refers to the period before applying for Medicaid. In this period, the applicant’s financial transactions are reviewed.

Medicaid authorities examine the applicant’s asset transfers in this period. They are looking to see if any assets were given away or sold for less than their fair market value. This is done to ensure people do not intentionally reduce their assets to qualify for Medicaid when they otherwise wouldn’t.

During the lookback period, Medicaid is specifically looking for “gifts” or transfers of property, money, or other valuable assets.

If an applicant has made such transfers, Medicaid may impose a penalty period. During the penalty period, the individual is ineligible for benefits for a set number of months, based on the value of the transferred assets.

This rule only applies to individuals applying for long-term care services. These are services such as nursing home care. It doesn’t apply to those seeking other forms of Medicaid assistance. This is why it is crucial to establish a well thought out estate plan that factors in long-term care needs in advance.

Proper estate planning is crucial for navigating the complexities of the Medicaid lookback period and avoiding penalties. Whether you have an estate plan or not, if you are thinking of exploring Medicaid as a long-term care option, give my office a call at (470) 235-7868.

Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!