Whether you know it or not, there is a very good chance that you, or your spouse, will need to qualify for Medicaid at some point in your life. The reason for this is the high cost of long-term care in the United States. Because most people do not have insurance that covers long-term care costs, over half of all seniors end up turning to Medicaid to help defray the high costs of care. Although Medicaid will help pay for long-term care, qualifying for Medicaid can be tricky in light of the program’s asset an income limits. Simply giving away assets when you discover you need to qualify for Medicaid is not an option because of Medicaid’s five year “ look-back ” period. Because there is a good chance you will need Medicaid benefits at some point in time it is imperative that you understand the look-back period concept now.
Medicaid is a federally funded (primarily) but state administered healthcare coverage program for low income families and individuals. What makes Medicaid so attractive to seniors is that unlike Medicare, Medicaid actually covers long-term care costs. At an average yearly cost of well over $100,000 in New York, this is important. To be eligible for Medicaid, however, you cannot have assets or income that exceed the (relatively low) program limits. More importantly, you cannot simply give away valuable assets when you realize you will need Medicaid because part of the Medicaid application process includes a five year “ look-back. ” The look-back allows the program to check your finances for the previous five years for assets transfers. If any are found, they can disqualify you for benefits for a period of time.
How long you are disqualified depends on the value of the assets transferred and the average monthly cost of care in your state. For example, if the average monthly cost of care is $5,000 and you transferred assets valued at $50,000 you would be ineligible for Medicaid benefits for 10 months ($50,000/$5,000 = 10).
On important note regarding the Medicaid look-back period though is that the State of New York has historically applied the look-back rules differently than most other states in that New York has not applied the look-back requirement to home care, also referred to as “community care.” This is one of the many reasons why you should always consult with an experienced New York Medicaid planning attorney long before you think you may actually need to qualify for Medicaid benefits. By incorporating Medicaid planning into your overall estate plan early on you can ensure that your assets are protected and that you will qualify for benefits when you need them.
If you have additional questions or concerns about Medicaid planning or estate planning in general, contact the experienced New York estate planning attorneys at The Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.