What is the look-back period for gifts made by a Medicaid applicant or spouse?
Because Medicaid applicants must have limited income and assets in order to qualify for Medicaid, a scenario may arise wherein an otherwise well-off applicant gives away all of his/her assets as gifts just before applying. To combat this practice, Medicaid instituted the “look-back period.” This refers to the time period prior to the application for which Medicaid will consider gifts made by an applicant or spouse.
In every state but California, the look-back period is 5 years. This means that, if one applies on August 3rd, 2018, Medicaid will count any gifts (assets given away for free or for less than their market price) dating back to August 3rd, 2013 against the applicant. If an applicant is found to violate the look-back period, Medicaid penalizes him/her by rendering them ineligible for Medicaid until a certain amount of time has passed. This amount of time is determined by the formula: [dollar amount of transferred assets] ÷ [average monthly private patient rate of nursing home care].
So, if you are applying for Medicaid and are found to have gifted $45,000 in assets two summers ago, and Florida’s average monthly private patient rate for nursing home care is $9,000 (to be exact, $9,171, as of 07/01/18), you will be ineligible for Medicaid for 5 months. [45 ÷ 9 = 5]