If you believe that you will need to qualify for Medicaid in the future, something you may be interested in learning about is the extended lookback period. The extended law for Medicaid’s lookback period has been pushed to January 1, 2022, instead of the previous date, July 1, 2021.
With the new law, the lookback period will be 2.5 years. What this means is that assets transferred since October 1, 2020, will be subject to the lookback period when determining if a person qualifies for Medicaid. Any transfers made before that date won’t trigger a lookback if an application is made before January 1, 2022. So, if you are considering an application for Medicaid, now is the time to do so.
Why would the state want to use a lookback period?
Lookback periods are periods of time prior to a Medicaid application that the state will review to make sure the application is not fraudulent. For example, if someone has transferred thousands of dollars to another party during the lookback period but now claims they cannot afford medical care, the state may ask that they pay at least a portion of those assets down before they receive coverage.
With Medicaid, it’s expected that you will spend down many of your assets in advance. With good estate planning, you may be able to protect your assets by moving them into trusts or gifting them to others, but only if you do so prior to the lookback period.
Qualifying for Medicaid is tougher with a lookback period in place
Everyone knows that many things can change in a few years. Someone who was completely healthy in 2019 may be unwell and unable to care for themselves in 2021. It’s essential that you take steps to protect your assets with the realization that you may lose many assets if you suddenly need to apply for Medicaid and have too much money or too many assets in your name.
Early long-term care planning can help. Take the time to go through the long-term care plan you think you want, so that you can begin taking steps to protect your hard-earned assets.