Nursing home care is expensive. Some people in Georgia may have enough in savings or assets to pay for such care, but many others rely on Medicaid to pay for their stay in a nursing home. However, the process of getting Medicaid can be complicated. One issue that may arise when seeking Medicaid for nursing home care is the “Medicaid look back period.”
In general, eligibility for Medicaid depends on a person’s modified adjusted gross income. This basis takes income into account, but not a person’s assets. However, this standard is general not used for those who need long-term services and supports, such as nursing home care. In these situations, a person’s assets will be considered.
For this reason, it is tempting to try to spend down your assets or give loved ones gifts in order to lower the amount of assets you have and thus qualify for Medicaid for nursing home care. However, this strategy could backfire due to the Medicaid look back period. The Centers for Medicare and Medicaid Services will examine all the applicant’s financial transactions for the five years prior to applying for benefits.
Although certain exemptions exist, generally any violations of the look back period, including spend downs and certain gifts will result in a penalty in which the applicant will not be granted Medicaid for a certain amount of time. This time period is based on the amount of money spent or gifted in violation of the look back period divided by the average amount that a person will pay for private nursing home care in the state in which they reside.
Gifting assets, selling assets or otherwise transferring assets in violation of the Medicaid look back period can be extremely detrimental, especially if the need for nursing home care is urgent. However, elder law professionals can help clients develop an appropriate strategy for creating a financial plan that does not violate the look back period. These professionals understand Medicaid eligibility and may be a useful resource.