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Law Offices of James C. Shields

The Medi-Cal and Medicaid Lookback Period Explained

The lookback period is one frequently misunderstood aspect of Medicaid and Medi-Cal, during which assets are transferred and eligibility for elderly people requiring long-term healthcare can change.

The Difference Between Medicaid and Medicare

Despite many people's tendency to use the terms interchangeably, Medicaid differs from Medicare in that while Medicare is an entitlement program that's covered via payroll withholding, Medicaid is a type of social welfare intended to support people in need. States and sometimes individual counties administer Medicaid, which leaves room for many variations in benefits and rules.

Typically, Medicaid is used to cover long-term care following the extinguishment of an individual's assets and funds, which is why many establishing long-term plans to preserve at least a modicum of their assets and savings, which individuals can then use to support their children or spouse while still qualifying for Medicaid.

Understanding the Lookback Period

Before you're on Medicaid, you might wish to leave a certain amount of money to a family member in a will. However, if you become a resident of a nursing home, that amount may be used to pay for care until Medicaid can cover it. However, you can protect those assets by gifting them to the family member now.

While this is a great way to ensure that your family members receive the assets you wish to provide for them, it's important to be aware of the lookback period for Medicaid.

When applying for Medicaid, transfers of assets or gifts made within 60 months, or five years, of the application date may be subject to certain penalties. On the other hand, gifts or transfers made over 5 years past the date of the application won't be subject to these penalties. This five-year lookback period could result in penalties, potentially leaving assets vulnerable and family members unprotected.

This lookback makes it important to plan ahead with Medicaid planning strategies.

If you would like some assistance during the Medicaid planning process and want to gain a full understanding of your options, please contact us at James C. Shields Law.