How does the Medicaid 5-year look-back period affect aging parents and their families? It’s complicated and requires a review of family financial transactions.
Author: Anne Bogardus, Founder (and former caregiver)
NOTE: This information is provided for educational and information purposes only. It is not legal advice. Please consult an attorney for specific questions on how to comply with Medicaid programs in your state.
One of the most difficult things to understand about Medicaid is how the five-year “look-back” period works and why it’s necessary. Dave Nesbit of Keystone Elder Law in Cumberland County, Pennsylvania, explains it this way in an article on cumberlink.com:
“The five year look-back that scrutinizes tax returns and bank statements is part of the process of requesting Medical Assistance (Medicaid), but seems invasive to most applicants. However, if your neighbor suddenly had a new SUV and RV valued at more than $100,000, you might ask if he’d won the lottery. If the neighbor said that rather than pay for his mother-in-law’s care in a nursing home with her money, he spent her money on the SUV and RV and got the government to pay for the nursing home, you might feel outraged that your tax dollars had enabled the acquisition of your neighbor’s recreational toys. Such abuse is avoided by the look-back regulations, which penalize any combination of gifts or uncompensated transfers of cash or property, which exceeds a total of $500 during any of the 60 months preceding a Medicaid application.”
When you look at it this way, the reasoning behind the look-back period makes a lot of sense. You can read the full article for Mr. Nesbit’s thoughts on ways the federal government can improve long-term elder care, changes in the Veteran’s Administration Aid & Attendance benefit, and the legal documents families should have in place.
As if providing care for aging parents wasn’t enough, there are legal and financial issues that must be sorted out to protect the vulnerable elderly as well as those who provide loving care to them on a daily basis.