60 Month Lookback

Q: I heard that you cannot make any gifts before 5 years of applying for Medicaid or else they will take it away from  you.  The people I gave money to, don’t have it.  What can I do?

A: This is a common question that really makes people nervous.  People give away money, cars, vacant real estate lots, etc. all the time.  The rules aren’t as bad as it may seem.  Let me explain.

There is a 60 month (5 year) lookback with a Medicaid application.  It’s only a lookback.  It doesn’t mean that you cannot give away anything, you just have to tell them you have done it.  Also, if you have made gifts, Medicaid won’t come back and take it, they will just not pay for the benefit you are seeking for some amount of time.  That amount of time is based on the value of the item you gave away. 

Medicaid will impose a penalty for the amount of time that the gift would have paid for the benefit.  For example, if you give away $45,000, that gift would have paid for 10 months worth of a nursing home.  Therefore, based on that gift, Medicaid will not pay for the next 10 months.  They will then pay on the 11th month (not 60).  It’s that simple unless you really have no money to pay for the 10 months. 

If you have made gifts in the past, it is best to consult an Elder Law attorney to see what your options are.  If you still have some money and have gifts in the past, we can make the gift minimized or disappear by using the money you have now.  If there are no gifts and you are paying privately for care, there are things we can do to protect usually 50-70% of the money and still qualify for Medicaid.