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Ask the Expert: Medicaid planning and the five-year look back

Can you explain the five-year Medicaid look back? I'm told a trust can be established to avoid the "look back." But I've also been told that's incorrect.

The five-year look back is part of what determines your eligibility for Medicaid nursing home care benefits. You can't avoid it with a trust.

Medicaid, the only government program that pays for nursing home care, is available only to people who are poor. People sometimes impoverish themselves to qualify for Medicaid by transferring their assets to their children, or to an irrevocable trust for their children's benefit.

This "Medicaid planning" is legal. But its success depends partly on its timing, because assets you give away within the five years immediately before applying for Medicaid trigger a penalty period during which you're ineligible for nursing home benefits. (There's no five-year look back for at-home Medicaid assistance).

To determine the penalty period, Medicaid divides the value of transferred assets by its regional rate for the monthly cost of nursing home care. On Long Island, that cost currently is $13,407. So transferring $134,070 to a trust within the five years before you applied for Medicaid would disqualify you for nursing home coverage for 10 months.

There are exceptions to this rule, says Esther Zelmanovitz, a Great Neck elder law attorney. "For example, you can transfer assets to your spouse, or to a blind or disabled child, or to a trust for the sole benefit of any blind or disabled person, without triggering a penalty."

And a trust isn't the only Medicaid planning option, she adds. Next week, I'll describe an alternative strategy for people who may need nursing home care in less than five years.

The bottom line

Transferring assets to a trust within five years of applying for Medicaid delays your eligibility for nursing home coverage.

More information

medicaidplanningassistance.org/medicaid-eligibility-new-york

benefits.gov/benefit/1637

TO ASK THE EXPERT Send questions to Ask the Expert/Act 2, Newsday, 235 Pinelawn Rd., Melville, NY 11747, or email act2@newsday.com. Include your name, address and phone numbers. Questions can be answered only in this column. Advice is offered as general guidance. Check with your own consultants for your specific needs.

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