Medicaid Changed the Rules Again? What Does the 5-year Look-Back Mean?

You may have heard that a new Indiana law was implemented in November, 2009, and you may be wondering if the changes have made it impossible to pre-plan for possible nursing home care. Rest easy, because we’ve been working on this for years, and there are many planning strategies available to save your hard-earned assets from catastrophic loss due to nursing home admission.

We’re taking calls every day from concerned clients and hearing questions like, “Now I have to wait 5 years to get Medicaid, right?” The simple answer is, “it depends”.

DRA (Deficit Reduction Act) was put in place last year (in Indiana) and made some major changes to the processing of Medicaid applications. DRA also changed the way we plan for Medicaid. Fortunately, we had plenty of notice prior to this law taking effect, and have been safeguarding our clients’ assets against the new rules for some time now.

Trying to understand the Medicaid rules can make your head spin! For example: One of the new rules is that the “look-back” period has been extended from 3 years to 5 years. This does not necessarily mean that you will wait 5 years to obtain benefits. The look-back period is determined by starting with the “look-back date”, which is simply defined as the date on which 2 things are true . . . first, you or your spouse are a resident of a long term care facility, and second, you have filed a Medicaid application. When both are true, you have established a look-back date. Now, go back in time 5 years from that date (but stop if you get to November 1, 2006 whether it is 5 years or shorter). This is your “look-back period”. If you transferred any assets and did not receive anything in return for that transfer, during the look-back period, the transfer is subject to a penalty and may disqualify you for benefits for a certain period of time.

But don’t give up there, because there are “cures”, and “partial cures” . . . and many other strategies for planning that can save you thousands of dollars! It’s a complex series of rules . . . and you shouldn’t be expected to wade through these waters alone.

That’s why you should consult with an expert whose job is to understand the rules and figure out the best planning strategies for you and your family.

Hunter Law Office, PC helps families protect their assets against loss from the unforeseen (and foreseen) events in life that inevitably take us off course. We are unique in that our practice is focused on each individual client . . . we design a plan around you and your family . . . because that’s what Estate Planning is supposed to be!