My mom has Alzheimer’s. Medicaid will probably penalize her due to the look back period. Is it possible to apply for Medicaid long term care now, even if it’s not needed right now, and get penalized for the look back period, so that everything is ready for when she does need nursing home care?
No, it is not possible for your mom to apply for long term care Medicaid now and be penalized for violating the look back period in preparation for when she does require Medicaid funded nursing home care. Further explanation follows.
To begin, Medicaid’s look back period is a period of 60-months that immediately precedes the date of one’s long term care Medicaid application in which the Medicaid agency scrutinizes all asset transfers. Specifically, the agency is looking for assets transferred under fair market value, which could equate to selling an asset for less than it is worth or gifting money to a family member or charity. (These are called disqualifying transfers). If an applicant has violated the look back rule, he / she will be penalized with a period of Medicaid ineligibility.
Let’s dig into why your mom cannot apply for nursing home Medicaid prior to the need for it with the intention of being denied and “serving” her penalty period. In order for an applicant to be penalized for violating the look back period, all long term care Medicaid eligibility criteria must be met. This includes having limited income and assets, as well as demonstrating a functional need for such care. (To see state specific requirements, click here). Therefore, if your mom doesn’t meet all of the requirements, she will not be found eligible for nursing home Medicaid, and if your mom is not eligible, she cannot be penalized for violating Medicaid’s look back rule.
However, even without your mom applying and being denied eligibility for nursing home Medicaid due to violating the look back rule, the clock is running on any disqualifying transfers she has made. For example, let’s say that your mom lives in Florida and gifted a loved one $20,000 on January 7th, 2017. In Florida, the look back period is 60-months, so as long as your mom applies for nursing home Medicaid after January 7th, 2022, she will not be penalized for violating the Medicaid look back rule. This is because the application was submitted after the 60-month look back rule.