This question is about Medicaid and that is “what is the look back period?”
With Medicaid theres’a 5-year look back period. If you’re familiar with Medicaid, then you’re familiar with the 5-year look back period, and even if you aren’t, you probably have heard something about Medicaid looking back in time when you applied for Medicaid.
What is that look back period?
Think of it this way, if today is August 7, 2015, so if I applied for Medicaid today and I’m qualified for Medicaid, then they look back 5 years in time.
What are they looking for over here?
They’re looking for gifts.
What’s a gift?
A gift is where I’ve transferred something like money, property, whatever it may be. I’ve transferred something in an exchange I’ve not received the full fair market back. If it’s a ,000 boat and somebody pays me ,000 for it and it really has a value of 10,000 well that’s a gift of 8,000. If I just give it away and get zero in return, that’s a ,000 gift. This applies to bigger numbers too.
If I have a half million dollar house and I give that to my child and there’s certain exceptions that apply. We won’t go into all those exceptions, keep them the general for now, the high level of this law without getting bogged down in the details but if I give away half a million dollar house to a child, that’s a half million dollar gift. I apply and I qualify.
To qualify now, you got to look back 5 years, 60 months and all this time period they’re saying, “What are the gifts that you have made?”
That’s what the look back period is. I believe our next question has to do with the penalty period but that is the look back. We apply the look back 5 years, and let me just say this, 1 implication of this is if, and i used this example last week, actually, I was training the lawyers all over the State of Alabama on Medicaid. I gave this example, what if 59 months ago, my client gave away 0,000 worth of assets and she’s qualified now. I could apply right now and get her on Medicaid.
Should I do that?
If I apply right now and I’m qualified right now and I look back 60 months, what will they going to see? Right here about month 59, they’re going to see she gave away 0,000.
There’s going to be a huge penalty.
To give you a real quick version of the penalty, you take whatever those gifts are, divide them by ,800, that’s what Medicaid says is about the price of a nursing home. Then you go forward in time and that is your penalty, so 580,000 gift. Remember, I made that 59 months ago. I apply to qualify now. They’re going to penalize me 100 months into the future. It’s like 8 years.
The key to understanding that look back is if you’re in a crisis situation right now and you’re trying to figure when do I apply right now?
In this particular situation, you wouldn’t apply right now. You would not apply the next month and go a little bit into the future so that when Medicaid looks back 5 years, they don’t see the 0,000 gift and, again, that’s not wrong. That’s just following their rules.
That’s the look back period.
Hope this was helpful for you.
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