What Is the Look-Back Period in New York?
The look-back period refers to Medicaid’s review of an applicant’s financial transfers within the 60 months prior to the submission of their application. If any gifts or asset transfers were made during this time, Medicaid initiates a penalty period based on the total amount transferred. Medicaid is a federal program that is operated at the state level and is known for its complex and strict eligibility policies. At Morgan Legal Group, P.C., our Medicaid planning attorneys know how to assist clients with navigating through the Medicaid application process. We have an in-depth understanding of the federal and state laws governing the program, as well as expert knowledge in advanced planning techniques. The look-back period is a crucial point in determining whether an applicant will qualify for certain benefits within the program. In New York, the 60 month, or 5 year look-back period is applied to those who wish to receive long-term care through a nursing home or other institution. Failing this review can leave applicants without the long-term care they need. This is why it is so important for prospective applicants to consult with a Medicaid planning attorney to ensure that their financial planning strategies for long-term care comply with Medicaid’s look-back period standards.
If you or a loved one reside in New York and are considering future long-term care through Medicaid, please get in touch with our Medicaid planning attorneys at Morgan Legal Group, P.C. We can help you explore different options to ensure that you are eligible for the program and secure your long-term care needs.
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Questions And Answers
Every state operates the look-back period a little differently. There are different types of Medicaid programs and different applications for specialized groups. For example, a senior who is in good health and is able to live independently would apply to different Medicaid benefits than a senior who requires round the clock care. In New York, the look-back period is only required for applicants who wish to receive long-term care in a nursing home or another institution outside of their home. Home or community care applications do not have to undergo a review.
A look-back period reviews specific financial transfers that took place five years prior to the date an application was submitted. These transfers are typically grouped into gifts and asset transfers. These can include monetary gifts, donated vehicles, or assets sold below their market value. Medicaid is a program that is designed for those with limited income. Indeed, applicants have to be at or near the federal poverty level. As such, the program seeks to ensure that people with the means of financing healthcare are not transferring their wealth for the sole purpose of qualifying for Medicaid.
A vast majority of states have the look-back period set at 60 months, or five years with California being the only state to have it set at 30 months. New York, at the time of this article is in the majority with a look-back period of 60 months. It should be noted that New York currently implements a look-back period for nursing home or institutional Medicaid. However, there are current changes taking place within New York’s Medicaid review periods. The state is also looking to add a 30 month review period for long-term care home and community services which, previously, had not required a look-back period for applicants.
If an applicant is found to have completed asset or gift transfers within the 5 year look-back period, Medicaid then initiates a penalty period. This is a period in which an applicant is deemed ineligible for Medicaid. The length of a penalty period is based on the total amount an applicant transferred. In New York, as in most states, the formula for determining the length of a penalty period is as follows: the total amount of money that was transferred divided by the average monthly cost of a nursing home in the applicant’s county of residence. For example, across NY, the average nursing home costs $12,000. If an applicant made a gift valued at $34,000, it means that they would be ineligible for Medicaid for nearly 3 months. During this time, they would have to find another means of paying for their long-term care.
Because Medicaid is designed to serve those with limited incomes, the look-back period is imposed on all applicants seeking long-term care in a nursing home or other facility. There are, however, different avenues an applicant can take to ensure that they meet Medicaid’s eligibility requirements. A qualified Medicaid planning attorney can guide an applicant through different advanced planning techniques that can be implemented with sufficient time in order to avoid a penalty period. These can include a Medicaid Asset Protection Trust, making asset transfers ahead of the 5 year look-back period, or creating a life estate, to name a few. Again, with any of these strategies, the key is to put them into place at least five years before applying to Medicaid.