Often confused, the look-back period and the penalty period are two distinct concepts in Medicaid planning. It is important to understand the applicability of each.
The look-back period is the five-year retroactive period beginning on the date you enter a nursing facility. Thus, if you enter a nursing home on November 1, 2017, the look-back period is November 1, 2012 to November 1, 2017. When our clients transfer property to trusts or otherwise transfer assets, we tell them that they need to make it through the look-back period. This means that they cannot apply for Medicaid to cover nursing home care for the five-year period after they transferred the asset.
Once you enter a nursing home and apply for Medicaid, Medicaid will review all your financial assets during the look-back period and look for certain asset transfers. Medicaid will aggregate the transfers and calculate an ineligibility period using a formula. If a penalty is calculated, you will be ineligible for Medicaid for the penalty period.
There are several planning techniques available to work around the look-back period and penalty period. Please contact us to discuss your options. We can be reached at 914-925-1010 or by e-mail me at firstname.lastname@example.org to discuss your options.