Medicaid Planning: Medicaid’s Five-Year Lookback Rule
A major concern for people as they get older is their housing situation. While some people own their homes, and plan on remaining there, others retire and purchase homes or move into new communities. Sometimes, even if someone plans on staying in their home, circumstances change and they need to explore options that provide them with additional assistance and care.
The cost for long-term care, such as assisted living, can vary based on the residence, size, and types of services required. According to market survey conducted by MetLife in 2012, the average base rate for an assisted living facility was over $3,500 per month, while the cost for a private room in a nursing home was over $240 per day. According to U.S. News and World Report, most people over the age of 65 will require long-term care services, and more than 40 percent of people will reside in a nursing home for some period of time.
The cost of long-term care can be daunting for anyone. It’s important to explore options to prepare financially for the costs of long-term care. One option is to seek support for Medicaid planning.
Institutional Care Program
For individuals in Florida who require the care provided by a nursing home or facility, there may be support available from the Institutional Care Program (ICP). The program is a Medicaid program that provides financial assistance for people who are in or entering a nursing facility. The program pays for some or all for the cost of the care provided by the facility, as well as providing general medical coverage. The amount of support that someone is eligible for is determined by a review of income and assets. There is no time limit – ICP will provide assistance so long as the resident is in the nursing facility.
In Florida, ICP long-term care benefits are often available for almost every individual in need of long-term care – while there is an asset limit and an income limit, with proper planning benefits are usually available. The program is administered by Medicaid, rather than Medicare, and is therefore designed to support low-income individuals in need of long-term care. Due to these limits, and the goal of the program, transfers of assets or money generally cannot be made in order to become eligible for Medicaid’s ICP.
Transfers are prohibited by a rule that is often referred to as the “five-year look back rule.” An article by Forbes explains that gifts or transfers of assets that were made within five years of the date of the application for Medicaid benefits, such as benefits from Medicaid’s ICP, may be subject to penalties or cause the applicant to be ineligible for benefits. Limits on eligibility are complex, but, fortunately, legal professionals can help you understand your options and help you prepare for the future.
It can be difficult to anticipate how our needs might change as we get older. However, it’s important to plan far in advance of needing services such as long-term care. Our Florida attorneys at the Millhorn Law Firm can help you review your resources, restructure as needed, and, when the time comes, file the application. Planning for the future can be difficult; let us guide you through the process.