The Georgia Medicaid program offers needs-based health insurance coverage to those who have low income and health concerns. Oftentimes, people only apply for Medicaid when they find themselves facing expenses that they have no means of covering, such as the cost of living in a nursing home or staying at a rehabilitation center during their golden years.
While Medicare does cover basic support needs, it does not cover nursing home expenses and similar costs, like in-home nursing support. By the time someone recognizes that they need Medicaid benefits, they may not have any resources to cover their care costs anymore. Unfortunately, they may end up subject to a penalty due to transactions that they may have completed several years prior.
The Medicaid lookback period imposes penalties on applicants before they acquire benefits, and it is one of the reasons why advance planning for benefits is so important.
How does the lookback period work?
When someone applies for Medicaid benefits in Georgia, state employees review their application carefully. Their current income and resources are only part of the equation. The state also needs to look at 60 months or five years of financial transactions. Large transfers and gifts during that time will likely trigger a penalty.
The state totals up what it considers inappropriate transfers and then converts that figure to a number of months that an individual will need to cover their own costs. The issue with this approach is obvious. Those prior transfers have still deprived someone of access to or control over those resources. They won’t have the thousands of dollars necessary to cover those nursing home costs on their own, but they will have to wait some time before Medicaid will pay for their care.
Prior planning is key to quick approval
Waiting months for Medicaid benefits to start could affect someone’s health and quality of life. It could also lead to huge amounts of debt and prevent them from leaving any significant resources for their loved ones when they die.
Those who do not want to gamble with their health or legacy can engage in Medicaid planning early in retirement as a way of helping protect themselves in the future. The sooner someone makes transfers into a trust and otherwise changes how they hold certain assets, the less likely they will be to have to worry about a penalty if they apply for Medicaid in the future
Discussing resources and likely future needs with a legal professional can be a good starting point for those who are worried about Medicaid planning and other basic estate planning processes.