Can someone explain what the 5-year "look back" period for Medicaid is?

Does anyone know if you "gift" to your parent $13,000 a year, will there be any penalties? Everything here seems to pertain to parents gifting to their children and our situation is the opposite.

Is there a look back period if your parent is on Medicaid and was only sent to a nursing home for rehab because there were no beds open in the hospital's transitional care unit? Mom put her $24,000 home in my name back in 2010 (4 years ago), only to save on probate and inheritances taxes, never expecting to have to recooperate in a nursing home for 3 months. I still argue that if there would have been a bed in our hospital's transitional care unit, then hospitalization would have paid, but because of where she was sent, she was penalized. After her discharge, she went back to her home of 70 years (yes, the one in my name) where she still lives by herself today. From our experience with a nursing home, people may walk in there, but not many will ever walk out of there. Mom was put there for rehab, but all they did was put her in a wheel chair and pushed her everywhere. Had my siblings and I not insisted that she get more intensive PT, I don't think she would have walked out. So yes, they kept her there for 3 months, she got penalized over $8,000 for property gifting, and now I'm still furious about it. I think that 5 year look back period should be looked at one case at a time. I get so frustrated when I see the way Medicaid, Welfare, food stamps are handed out to non-citizens and generational welfare recipients, but when an 89-year-old resident who actually needs it gets penalized, it's not fair.

Grandma had a life estate put in place in 1984. Dad held the deed. Dad died in 2002, Grandma died in 2005. I was made trustee after Dad died. Medicaid was used for Grandma from 1999 to 2005. Am I responsible for Medicaid recovery?

I now understand the "5 year look back", but what about if your parent gave you the house, but has a life use on the property. I am also her care giver. I live with her and take care of her, but the deed to the house is now in mine name with the life use clause for my Mother. I was told in this case, it is a "2 year look back". Could you please provide any knowlwdge of this. Thank You.

my mother lives in a house that belongs to my husband and me. we don't charge her any rent however we get her to be financially responsible for any repairs. if we have to put her in a managed care facility, will those expenses be disallowed on a 5 year look back? we just never thought about getting her to pay monthly rent

Hi Duke, Not Jan.1, 2012.
First day you can apply would be Jan. 1, 2018!! At least 5 years and a day to be safe.

If monies were taken from a parent in Dec 2012 , when could we apply for Medicaid to avoid the 5 year look back. Is it 5 years from that date of transfer or 5 years from in this case Jan 1 2012?

My father suddenly took ill and we had to put him in nursing home, he has a life insurance policy for his burial, it is set up as a death benefit but still has a cash value, whoever the nursing home will be taking all his pay and I will have to pay this premium, can I become the owner of policy or is it to late?

Do you know what the allowable amount for gifting in Indiana without medicaid penalty is?

my mom deeded her house and land to me several years ago. i, of course, have let her live there at no cost other that repairs and upkeep. Was it a mistake for us to think she could legally use her funds for repairs on a house that was no longer in her name. now the house needs painting and some repairs. will these types of expenses count against her in the 5 year look back if she has to go into managed care. it didn't occur to me at the time

Can you please tell me what may be involved in going from community Medicaid to institutional Medicaid? my relative has been on community M. for over 20 years with a large spend down. Will another look back period be required? If so, what will they be looking for?

If you sell the house, you will have converted an exempt asset into a countable asset. Then she would be disqualified from Medicaid. If she gives away the house, you run into the 5-year lookback rule and penalty period discussed above.

My mother owns a house that her name only is on the deed. She is nearing the point where she may need to go into a nursing home. Should we sell the house before this happens?

Hospice care is covered by Medicare (vs. Medicaid), which does require a means test (i.e., it does not matter how much in assets or income the person has). So the five-year lookback does not come into play.

Does the look back period also apply if someone is going to be placed on
hospice care at home?

To AnnPA14: If your mother receives a legal interest in the home you are building--at least equal to the amount of money she is transferring--at the time she transfer the money, then it is not a gift, since she is receiving equal value in return. I advise you to contact an elder law attorney to ensure this is all done correctly.

In the state of PA : My mother is planning on selling her home. In the meantime my husband and I are going to build a new home and she will be living with us. If she writes out checks totaling $25,000.00 to the home builder will these be subject to the 5 year lookback ? Would it make a difference if my name was on the checking account with her name on her checking account?

Need to follow this question.

If your mother gives you money, it is a gift that results in a penalty period (i.e., period disqualification from Medicaid). One possible way to get money to you and minimize the penalty period is to give you a certain percentage of her lump sum and use the balance to purchase a type of immediate annuity known as a "Medicaid annuity." In order to calculate the numbers and do this right, you will need to contact an elder law attorney to assist you in this. I devote an entire chapter of my book, together with examples, on how this technique works. Good luck with everything!

My mom was on Medicaid for one year. She is in an assisted living. She got a lump sum of money from a family farm that was sold. She is now on private pay living at the same location. She wants to give me 15k to 20k for updates on my home, something we had planned on doing prior to her going on Medicaid. Is she able to do this? I have no other siblings and she doesn't want to spend the money on herself as much I try and encourage her to do so. Buy herself a big screen tv. buy all the movie channels, a new bed etc. I've talked her into getting new dentures and some new clothes and an occasional pedicure but other than that she is just not interested in buying herself anything. It's frustrating because I want to see her enjoy the money she finally got after so many years of not having anything. She said she would rather see the money go to updating my house.
I don't want to compromise anything when it is time to go back on Medicaid so we are not sure how to handle this. Any help would be appreciated.

A regular loan will be treated as an asset unless it is structured so that it is non-transferable, non-cancelable, with adequate security, equal payments and a few other requirements of the statute. In such case, the loaned amount will NOT be a countable asset nor will the loan be counted as a gift, and the monthly payments back will be treated as income for Medicaid purposes. However, note that some states--in derogation of the federal law--do not follow this, and will treat the loan as a gift.

What if the money given is a loan not a gift and being paid back on a monthly basis, how does that look during the look back period

Father is 94, living alone at home in Ohio. His sight is very poor and getting worse plus other issues, though mentally fine. Three siblings offspring are concerned with grasping of his assets. This amounts to around $120,000 for his home and another $180,000 for his liquid financial assets. With Social Security and Army pension, he earns about $2,000 per month. Should he start giving $14,000 away per year? Can he give also to grandchildren or great grandchildren to decrease his estate. Would this be looked back at for 5 years in Ohio? What would happen to the gifted amounts?

Hel2 - the NH is not in the real estate biz & neither is Medicaid. Neither is going to "seize" grannies house. But both expect a Medicaid NH resident to do whatever possible to pay for their stay and their costs paid. For the NH, the Medicaid resident will be required to do a "co-pay" of their personal monthly income to the NH. For Medicaid, the program will pay for the NH costs (assuming they qualify both financially and medically for NH level of care) BUT upon death any "exempt" asset will become a non-exempt asset. For most in a NH & on Medicaid, the only exempt asset left is their home. The states are required to have in place MERP - which is Medicaid Estate Recovery Program. What MERP does is, when feasible, to place a claim or a lein on the now nonexempt property. The key is - imho - whether or not the claim or lein is FEASIBLE. MERP has many exemptions and family has to file for those exemptions and provide whatever documentation needed to MERP.

MERP is run according to your state's law on death and probate. Like in some states MERP is done via a lein on the property. Other states - like TX - have it as a Class 7 claim against the estate (so class 1 - 6 get paid first). Some states are actively going after recovery, while other states (FL) not so much. Remember Medicaid is a joint federal & state program, but the individual state manages Medicaid and has to do so that it complies with state laws. Really this means you have to find an elder law specialist who understands how it runs in your state.

But back to the co-pay, what happens is that since they are required to do a co-pay of their income if they are on Medicaid, there is no more of grannies $$ to pay for everything on the house. Whether or not the state allows for some of grannies monthly income to be diverted to the costs on the house is by each state's discretion. Some states do and for a certain period of time, while other states don't. So if your state doesn't allow for a diversion, then family has to then pay for everything (taxes, insurance, utilities, maintenance, yard work, repairs.....etc) for grannies house. If there is still a mortgage, this could add up to alot of $ each month. So the house ends up getting sold with the proceeds from the house to pay or reinburse Medicaid the costs of grannies care. For most folks, it's just not feasible in cost to deal with a house for the possible years and years that grannie could be in a NH and then do whatever needed to get the MERP exemption after grannie dies. Plus often family totally run out of a sense of humor in having to cut the grass, or having to pay property taxes or all the other stuff that can happen with an empty house. Good luck & keep a sense of humor!

if the assets are in a home is that protected in NJ law? In the case of a resident owning a home in NJ and then going into a nursing home, would the home be seized by Medicaid?

Yes, she can purchase furniture without it causing any type of penalty. All such personal property is considered exempt when and if she applies for Medicaid at some point.

My question does not concern a nursing home. As I wrote, my mother is living in my home and we plan to continue for her to live with us.

She has about $45,000 left. We do not have a 5-year look-back. In 2012, she gifted me $13,000 and her grand-daughter, $5,000 at graduation. She has less than a year's worth of savings before being Medicaid eligible. I understand there will be penalty on the monetary gifts because they fall within the 5 year look-back. Can someone tell me what these penalties may be? Can she make furniture purchases to support her comfort/care? She does not own life insurance, property, stocks or mutual funds. She is non-ambulatory, relatively healthy and not on any pharmaceuticals. We do not plan on having her go into assisted living as we feel her care is best managed at home with our family and emotional support. Any and all help is greatly appreciated. I'm retired with no pension, small social security, overwhelmed and with limited resources. Thank you.

The way the five-year lookback period works is as follows: When a person applies for Medicaid for nursing home care, all gifts made by that person within the previous five years are added together. The total number is then divided by the average cost of a nursing home in the state (or locality, in some states) where the person is living, to come up with a number that equals the "penalty period," i.e., a number of months that Medicaid will not pay for that person's care.
That divisor number (average cost in a state) is set by each state in January. To find out what it is in your state, call your state Medicaid eligibility department.

My mother will be 98 in June, 2013. She has been living in my home in NYS for 6 years and she pays for private duty care. She has about $45,000 left. We do not have a 5-year look-back. In 2012, she gifted me $13,000 and her grand-daughter, $5,000 at graduation. She has less than a year's worth of savings before being Medicaid eligible. I understand there will be penalty on the monetary gifts because they fall within the 5 year look-back. Can someone tell me what these penalties may be? Can she make furniture purchases to support her comfort/care? She does not own life insurance, property, stocks or mutual funds. She is non-ambulatory, relatively healthy and not on any pharmaceuticals. We do not plan on having her go into assisted living as we feel her care is best managed at home with our family and emotional support. Any and all help is greatly appreciated. I'm retired with no pension, small social security, overwhelmed and with limited resources. Thank you.

Swimmer2 - my experience with dealing with transfer penalty is that it depends on
if the intent was done for Medicaid avoidance combined with when it was done. In general the state sends out the transfer penalty letter that assumes the transfer was done with intent and you have to prove otherwise. Then you kinda have to factor in your state's management of the Medicaid program AND the specific nursing home AND how proactive the family member who is the financial point person for the elder is AND the amount & type of transfer penalty AND most importantly if you have an attorney. If you get a penalty letter, the first thing is to file an appeal which basically gives you an additional 90 days (I'd defientely get an attorney in this 90 day period). The appeal has to be faxed (with a transmission report so you can show you did it) or sent return registered mail so again you can show you did this).If your parent is in the NH "Medicaid pending", the NH has to keep them during this appeal period. But the NH can ask that someone within the family sign off to be financially responsible for the elder - often that form was already done in the plies of paperwork in the initial admission. So if Sissy signed mom in and signed her name to all, then Sissy is financially responsible for the NH debt. The NH can and will send someone a bill and the family need to figure out how to pay for it either by doing a guarantee against the elder's assets or their own assets. So if Sissy signed them in, that means Sissy will likely get the bill for private pay amount for the elder's NH stay.

Now if Sissy signed all forms as "Jane Smith Jones as DPOA for Mary Smith" then she is not responsible. This is imho a very important item to do on all paperwork and in the rush and stress of getting them into the NH is overlooked.

For tangible property - like a home or a car - the state will easily found out if ownership is changed or transferred and the amount paid or gifted.
Tangible property value is usually done by each county or parish assessor and then dovetailed into the state's database so that info is just keystrokes away.

At my mom's first NH, there was a lady whose son transferred her home into his name after she was in & on Medicaid, imho done deliberately to avoid the state from taking it after she died. Also imho he is a total jackass. House definitely under 100K in value, maybe 50K. The lady was in the NH for several months before the transfer was found out. She was across the hall from my mom. State sent NH and family a letter regarding a transfer penalty was in effect. Son did the whole not gonna pay nonsense for like 4 months and what happened is that the lady was made an ward of the state and shipped out to a NH in another county that was desperate to fill their beds,as she was a ward of the state the family wasn't told; the son was billed probably 60K by the NH to forever be on his credit history and a claim was probably placed on the property by the state. This is an awful situation. So if he ever wants to do anything with the house later on, that claim has to be released in order to get a clean title. Not even to start to talk about what the little lady probably went through. What is so loco about what he did was that if he had just left the house alone and left it in her name and he just paid whatever minimum on it - like taxes - then when she died the state probably would not even have done a MERP (estate recovery) claim on it because the value of the house is too low to be worth going after it in probate and the time and costs involved in all that. So he would have gotten the house in the end in the probate hearing and the state would have paid for his mom's NH stay 100%.