In Florida, caring for the elderly is a common concern. Those who are thinking about how best to provide the necessary care and attention to an aging loved one will inevitably start thinking about the financial aspects. This is a natural part of the process. Medicaid is one way in which people who require nursing home care or home and community based services (HCBS) will pay for it.
However, there is growing concern over Medicaid funding and eligibility. Knowing how eligibility is determined is the first step toward getting approved so an elderly person can get the care they need without it completely draining all the assets and property they have accrued throughout their life.
One critical part of the Medicaid process is the look-back period. This can dramatically impact Medicaid eligibility, so it is essential to understand exactly what it entails.
How does the look-back period work?
In the past, people who had too many assets to qualify for Medicaid would give them away to loved ones. Since Medicaid is a government program based on need, this loophole was closed. Florida looks back five years and checks a person’s assets when that person is applying for Medicaid for nursing home care or waivers for HCBS.
Financial records from the previous five years will be scrutinized. As part of that investigation, the transactions the applicant has made are analyzed. If they or their spouse dispersed property and did not receive fair market value for it, then this could be an obstacle to getting approved for Medicaid.
For example, if they owned a vacation property and sold it to one of their children for half of what the market value would be if they made it available to the public, this could raise suspicions that it was done to enhance the chance of being eligible for Medicaid for the care they are going to need. Losing Medicaid would mean the care would need to be paid for out of pocket.
There is a Medicaid Penalty Period for those who try to skirt the Medicaid eligibility rules in this way. The person will be penalized from the date in which they sought Medicaid and was denied for a violation of this rule. A penalty divisor will be used to determine how much the penalty will be.
Although many asset transfers violate the look-back period, some do not. If a person transfers assets to their spouse, then they can still get Medicaid for their long-term care. The same is true if it is transferred to a disabled child or a sibling. The sibling must already have an interest in the property and have resided there for a minimum of one year.
Understand the rules when applying for Medicaid for elder care
Finances come to the forefront when thinking about caring for elderly loved ones. Medicaid can help with those costs. Still, it is imperative to understand how to apply for Medicaid and avoid problems that can sometimes come up. Violations that are found during the look-back period can present challenges.
To avoid making missteps that can lead to a denial and penalties related to the look-back rule, it is wise to have professional help from the outset. Consulting with those who understand the ins and outs of elder law and Medicaid planning can provide guidance with full preparedness and getting approved for benefits.