Medicaid is a government program that provides financial assistance to elderly people with limited resources to help them pay for medical expenses. When seniors apply for the program, Medicaid conducts a five-year lookback assessment. Applicants must meet strict eligibility criteria, which will be evaluated during the review process.
Before starting the Medicaid application process, elderly individuals may need to spend some of their financial resources to meet the eligibility criteria for receiving services. However, it is critical to exercise caution and avoid attempting to create a need that does not truly exist.
Penalties may be imposed
During the five-year lookback period, Medicaid reviews your financial transactions to identify any expenditures that may have been used for your current medical expenses. For example, suppose a senior is found to be eligible for Medicaid but has given financial gifts to family members during the five years prior. In that case, Medicaid enforces a period of ineligibility for receiving benefits. This timeframe is often called the “Medicaid Penalty Period.”.
In other words, if a senior applicant gifted their grandchild $10,000 four years ago, Medicaid may impose a temporary penalty on the application. Medicaid operates under the assumption that the senior applicant would have utilized the $10,000 to cover medical costs had it been accessible. While Medicaid benefits may still be approved, a penalty will be imposed, delaying the start of coverage.
What are the implications for seniors applying for Medicaid?
Suppose your application is approved but there is a penalty term. In that case, you will be responsible for paying for your nursing home or medical care directly from your own funds until the penalty period ends.
The Medicaid five-year lookback period may be complicated. To avoid any potential penalties, seniors should seek assistance with the application process.
