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What is the Medicaid look-back period?

On Behalf of | Feb 25, 2020 | Elder Law

One of the biggest concerns that senior citizens in Colorado have is how they will afford to pay for a nursing home or long-term care as they start to require some assistance with basic living tasks that they used to be able to do for themselves.

After all, no matter how hard they tried, many residents of Woodland Park and the greater Colorado Springs area will find that they simply do not have the resources to pay for assisted living when the time comes.

Furthermore, Medicare, the federal program for all senior citizens, generally will not cover any more than a relatively short stay in a nursing home or assisted living facility.

Many couples will therefore consult with an attorney who has experience in elder law so that they can qualify for Medicaid.

Unlike Medicare, seniors can only qualify for Medicaid if their income and property fall below certain caps, as the point of Medicaid is to provide medical care, including long-term care, to people who do not have the income and assets to otherwise pay for it.

In order to qualify for Medicaid, senior citizens are allowed to dispose of their assets by giving them to loved ones, such as those that they would otherwise leave an inheritance for. However, there is an important catch to this rule, and this is the look-back period.

In most states, regulators will look back 60 months, or 5 years, and count the dollar value of all gifts seniors made to others.

Using a formula, the regulators will then impose a penalty of a certain number of months that is supposed to account for the fact that the senior could have used those gifts to pay for a nursing home. During the penalty time, which begins when the senior becomes eligible for benefits, Medicaid will not pick up the tab for a nursing home stay.

There are a few exceptions to the look-back rule. For instance, a person can give unlimited amounts to his or her spouse without a penalty. There are also other ways which seniors can legally dispose of their assets without worrying about the look-back period.

Still, those who feel they will need to qualify for Medicaid in order to pay for a nursing home should proceed with caution.