What Is The Five-Year Look back Period?
The five-year look back period is a term that applies to Medicaid with respect to nursing home Medicaid. People don’t often understand the concept because it’s a little bit complicated. Medicaid has two major components: one for those who want to stay at home, and one for those who want to or have no choice but to go to a nursing home. It’s very expensive to be in a nursing home and it’s very expensive for Medicaid to maintain a nursing home. If a person gave away any money during the five years prior to the application for nursing home Medicaid, then Medicaid will apply what is known as a penalty period. For every month’s worth of money they gave away in terms of the average cost of nursing homes in the county where they live, Medicaid will refuse to pay for the nursing home for one month. That’s the penalty period.
For example, the average cost of a nursing home in Nassau County is approximately $15,000 per month. If at any time during the last five years the applicant gave away $15,000, then Medicaid will penalize them for one month by refusing to pay the nursing home bill for the first month. Any money that was given away during the prior five years will go towards that penalty calculation. They’ll divide it by the average cost of the nursing home to determine the number of months they will apply that penalty. So if the client gave away $30,000 in the past five years, the penalty period will be the two months; $45,000 is three months, and so on.
In order to deal with this proble, people should plan early on. If there is a history of dementia in the family or if someone knows that they are going to be alone as they get older and they are concerned about nursing home expenses, then they should begin planning five years before they think they will need to be in a nursing home. They need to move their assets into a Medicaid asset protection trust or some other structure so that they can live out those five years without needing a nursing home and still qualify when they do need to be in a nursing home. If a person has not planned for needing to be in a nursing home and they need immediate nursing home care, then Medicaid is going to expect them to spend down all the non-exempt assets they have until they reach the threshold of $15,100, before Medicaid will pay for the nursing home.
In this circumstance, we have the capability of doing what’s known as emergency planning. Under an emergency planning scheme, we can generally preserve approximately 45 percent of a person’s assets. They are going to lose some of the assets to the nursing home costs, but we can preserve close to half of it for the family. Thus, early planning can save a lot of money. Now, it’s important to keep in mind that the five-year look back only applies to Medicaid for nursing homes. By using the appropriate balance in terms of the strategy of how to apply for Medicaid and how to structure the assets, oftentimes we can preserve virtually all of the individual’s assets under both home Medicaid and nursing home Medicaid scenarios. The main preservation purpose is for the children. A lot of my clients come to me through an introduction from their children. The individual who is applying is my client, but the child is often the one who brings them to me and says that they need Medicaid. The parents know this, and they want to save as much as possible to give to their children when they pass away; they don’t want it all to be used up on medical costs, so they’re very amicable and willing to take part in the process.
Akiva Shapiro, A Personal Attorney for Your Life, Business & Legacy
I call myself a personal attorney for your life, business and legacy. This is because I look to get a clear understanding of the client’s entire life from a holistic legal perspective. It’s important to understand where the client is coming from, where they’re headed, where they want to go, what they have and what they want to protect.
It’s about protecting your rights, assets, what you own and what you are entitled to. If an attorney doesn’t understand a client’s overall situation, then they won’t be able to protect their assets or properly represent them. It’s very important to look for an attorney who the client can relate to and feel comfortable with. If a person can find the type of attorney who has the skills to do the job, as well as the individual personal skills, then they are going to be happy with that attorney.
For more information on Five Year Lookback Period for Medicaid in New York, Long Island, Nassau or Suffolk County, a free phone consultation is your next best step. Get the information and legal answers you are seeking by calling (516) 806-0762 today.
Related Articles:
