Indiana Medicaid for Seniors: Navigating the Look-Back Period

For over half of all seniors, Medicaid plays a crucial role in helping them cover the high cost of long-term care. Eligibility for Medicaid, however, depends, in part, on an applicant’s income and the value of their “countable resources.” One of the most important rules to understand if you are a senior hoping to qualify for Medicaid is the Medicaid look-back period which can significantly impact your eligibility. To help ensure that you receive the assistance you need, an Indianapolis attorney at Frank & Kraft helps Indiana seniors understand the Medicaid look-back period.

What Is the Medicaid Look-Back Period?

If you apply for Medicaid as a senior, part of the application process involves reviewing your income and the value of your “countable resources.” The Medicaid “look-back” period refers to the timeframe considered when reviewing your application. To be eligible for Medicaid, you must not have transferred assets for less than fair market value during the look-back period, which is 60 months in Indiana.

The look-back period exists to prevent individuals from giving away assets or selling them for less than they are worth simply to meet Medicaid’s asset limits. Medicaid is intended to assist those who truly need financial help, and this rule ensures that applicants have not artificially impoverished themselves to qualify.

If you did transfer assets for less than fair market value during the look-back period, Medicaid may impose a waiting period during which time you will not be eligible for benefits. The length of the waiting period is determined by dividing the value of the assets transferred by the average cost of long-term care in your area.

How the Look-Back Period Affects Medicaid Eligibility

If an applicant has transferred assets for less than fair market value within the five-year look-back period, Medicaid will impose a penalty period. This penalty period is a length of time during which the applicant will be ineligible for Medicaid benefits, including coverage for nursing home care.

The penalty period is calculated by dividing the total amount of assets transferred by the average monthly cost of nursing home care in Indiana, which Medicaid determines annually. For example, if you gifted assets valued at $100,000 within the look-back period and the average monthly nursing home cost is $10,000, the penalty “waiting period” would be 10 months. You would be responsible for paying for your own care during that time before Medicaid benefits start kicking in and helping with your long-term care costs.

Exceptions to the Look-Back Rule

While it is crucial to be aware of the Medicaid look-back rule when planning for long-term care costs, it is also important to know that not all asset transfers trigger a penalty. Certain transfers are exempt from the look-back rule, including:

• Transfers to a spouse: Assets transferred to a spouse are not subject to penalties because Medicaid considers the couple’s combined resources when determining eligibility.
• Transfers to a disabled child: If an applicant transfers assets to a child who is disabled (as determined by Social Security Administration standards), it does not count against them.
• Transfers to a trust for a disabled individual under 65: Assets placed in a trust for a disabled person under the age of 65 are exempt.
• Transfers of a home to a caregiver child: If a child has lived in the applicant’s home for at least two years before the applicant enters a nursing home and has provided substantial care that delayed the need for nursing home placement, the home transfer may be exempt.

How Can Medicaid Planning Help?

If you believe that you will need to rely on Medicaid to help cover long-term care costs as a senior, it is in your best interest to incorporate Medicaid planning in your comprehensive estate early on to ensure that you qualify – without incurring a penalty – when you need benefits.

Can We Help You Navigate the Indiana Medicaid Look-Back Period?

For more information, please join us for an upcoming FREE seminar. If you need assistance navigating the Indiana Medicaid look-back period, contact an experienced Indianapolis Medicaid planning attorney at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.

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