Medicaid's look-back rules look at any gifts or transfers a person made within the five years prior to applying for long-term or nursing home care through the program, according to Forbes. This prevents applicants from transferring assets to avoid using them to pay for long-term care expenses.Continue Reading
Applicants are unable to get long-term care coverage for a certain length of time if Medicaid discovers that transfers were made during the look-back period. This length of time is determined by taking the value of the assets transferred and dividing the amount by the average monthly cost of nursing home care in the local area, according to Forbes.
There are exceptions to the look-back rule, according to Nolo. For example, property that is used to produce support, such as business property, is exempt. One automobile may also be exempt, depending on state laws and marital status, as well as small, invaluable personal effects and household items. In rare instances, transfer of a primary residence may also happen without a penalty, such as when it is gifted to a spouse or disabled child. It may also be gifted to a sibling or nondisabled adult child who resided in the home for at least one or two years, respectively, immediately prior to the application for Medicaid long-term care coverage.Learn more about Health Insurance