The Medicaid Look-Back Period, Explained

The Medicaid Look-Back Period, Explained

Assisted Living vs. In-Home Care: Which is Better for You?

Life is full of surprises and, unfortunately, not all of them are pleasant. Health emergencies are among the most jarring and life-altering things that can happen to you and your family. An unexpected medical event can change just about every aspect of your life, from your ability to earn an income to your entire family dynamic. If you or a loved one finds themselves facing an unanticipated trip to a nursing home, it can also be extremely expensive. Qualifying for nursing home Medicaid is one of the best ways to protect yourself from running through your savings, but eligibility is a tricky situation which involves planning—thanks to something called the Medicaid look-back period.

What is Nursing Home Medicaid?

Nursing homes are often prohibitively expensive for most families, with yearly costs generally exceeding $100,000 a year. Nursing home Medicaid is a way for families to receive assistance that will help defray these costs. Medicaid will often cover 100 percent of most essential nursing home services; including room and board, skilled nursing care, meals, rehabilitation services, medications, and maintenance. Some services that may not be covered include private rooms and specially-prepared food. While most nursing homes do accept Medicaid, this is not always the case, so it is important to always check.

How Does the Medicaid Look-Back Period Operate?

Nursing home Medicaid is considered a last option, only available for patients who have no other resources when it comes to payment. For this reason, patients that do not plan ahead may use up their entire savings before they qualify for Medicaid. Medicaid planning, though, can ensure that this does not happen. Medicaid eligibility is based on financial need and is subject to both a monthly income limit and a limit in the number of countable assets you possess. The key to qualifying for Medicaid without running through your savings is to spend down your countable assets or transfer them into non-countable assets. This may involve gifting your money to loved ones, setting up a trust, or using several other Medicaid planning strategies.

The problem with spending down your assets, though, comes from what is known as the Medicaid look-back period. This means that, when you apply for Medicaid, your financial picture over the last 5 years will be taken into consideration. If you suddenly find yourself in need of nursing home Medicaid, you cannot simply gift all your assets to a loved one. Any assets gifted during the last five years for less than fair market value will be taken into account in your application and can lead to a period of ineligibility. If you suddenly find yourself or a loved one facing a health emergency and needing to qualify for Medicaid, there are options that you can take. However, the best way to plan for Medicaid is to gradually transfer your assets over a long period of time, so you don’t find yourself scrambling at the last minute.  None of this should be done without a legal strategy designed and implemented with the assistance of an Elder Law attorney who understands the Medicaid rules.

Either way, nursing home Medicaid planning can be a tricky business, but it’s essential to maintaining your family’s physical, emotional, and financial health.

Contact Miller Estate and Elder Law

If you have any questions about qualifying for nursing home Medicaid or the Medicaid look-back period, do not hesitate to contact the experienced attorneys at Miller Estate and Elder Law by calling (256) 251-2137 or by filling out the form below. We’re here to help protect you and your family!

Subscribe to Our Blog

How Much Will Medicaid Pay Towards a Nursing Home Stay?

How Much Will Medicaid Pay Towards a Nursing Home Stay?


When it comes to long-term care, many individuals and their families rely on Medicaid to help cover the costs. Medicaid is a joint federal and state program that provides health coverage to low-income individuals, including support for nursing home care. However, understanding how much Medicaid will pay towards a nursing home stay can be complex, and eligibility depends on several factors.

Medicaid Eligibility

Before delving into the specifics of how much Medicaid covers for nursing home care, it’s important to address Medicaid eligibility. To qualify for Medicaid assistance for long-term care, an individual must meet certain financial and medical criteria. These criteria typically include having limited income and assets. Medicaid’s rules and eligibility criteria may vary from state to state, so it’s essential to consult with an elder law attorney or a Medicaid expert for guidance specific to your situation.

Medicaid Coverage for Nursing Home Care

Medicaid provides significant assistance for nursing home care, covering a substantial portion of the costs. However, the exact amount Medicaid will pay towards a nursing home stay depends on several factors, including:

  1. State Variation: Medicaid is administered by individual states, and each state has its own rules and regulations. This means that the coverage and payment amounts can differ significantly from one state to another.
  2. Income and Assets: Medicaid eligibility is based on income and assets. Generally, the lower an individual’s income and assets, the more Medicaid will cover.
  3. Level of Care Needed: Medicaid covers different levels of care, ranging from basic custodial care to skilled nursing care. The level of care required will impact the amount Medicaid pays.
  4. Nursing Home Choice: Medicaid has specific regulations regarding which nursing homes it will cover. It’s essential to choose a nursing home that is Medicaid-certified to ensure coverage.
  5. Look-Back Period: Medicaid has a 5 year look-back period during which it assesses an applicant’s financial transactions to prevent asset transfers aimed at qualifying for Medicaid. Understanding these rules is crucial to avoid penalties.

Medicaid plays a vital role in helping individuals afford the high costs of nursing home care. However, determining how much Medicaid will pay towards a nursing home stay is a complex process that involves various factors, including income, assets, specific state regulations for where you live, and the level of care required.

To navigate these complexities successfully, it is highly recommended to consult with an experienced elder law attorney who can provide guidance and help you make informed decisions about long-term care planning while protecting your assets and financial well-being.

For more information, do not hesitate to give us a call at (256) 251-2137 or contact us via the brief form below.


Contact Miller Estate and Elder Law

Remember, you are not alone, and seeking help is a sign of strength and dedication to your spouse’s well-being. Call us at (256) 251-2137 to discuss your legal needs, or get in touch with us by completing the brief form below.

Subscribe to Our Blog

Get the Facts: 10 Surprising Long-Term Care Statistics

Get the Facts: 10 Surprising Long-Term Care Statistics

older man nursing home resident sitting at dinner table with nurse smiling

When it comes to long-term care, many people are unaware of the potential costs, and the likelihood of needing such care in their lifetime. Planning in advance for long-term is crucial to safeguarding your assets and ensuring a financially secure future. Below, we’ll explore ten surprising long-term care statistics that highlight the importance of proactive planning.

1. Probability of Needing Long-Term Care

According to the Administration for Community Living (ACL), 70% of people aged 65 and older will require some form of long-term care in their lifetime. This statistic underscores the need for adequate preparation.

2. Average Length of Care

The average duration of long-term care is approximately three years. It’s essential to consider the potential financial and emotional impact of extended care needs.

3. Caregiving by Family Members

Family members provide the majority of long-term care, with around 83% of elder care being provided by unpaid family caregivers. This not only highlights the significant role that families play in the caregiving process, but also the lack of education around how to become a paid caregiver—yes, that IS an option!

4. The Rising Cost of Care

Long-term care costs are on the rise. The annual median cost for a private room in a nursing home is approximately $105,850 a year, while a home health aide costs around $56,056 per year. These expenses can deplete savings quickly if not planned for in advance.

5. Medicaid as a Primary Payer

Medicaid becomes the primary payer for long-term care services for many individuals. Around 62% of nursing home residents depend on Medicaid to cover their care costs. Medicaid has strict eligibility requirements, with a look-back period of 5-years. Once again, advanced planning is crucial in order to qualify for this government program—you may not need it now, but now IS the time to start planning.

6. Gender Disparity in Caregiving

Women tend to shoulder the majority of caregiving responsibilities. In fact, women are more likely to be informal caregivers, and provide care for longer durations compared to men.

7. Impact on Spousal Care

Approximately 75% of married seniors will require long-term care services, with the majority of care provided to a spouse. This emphasizes the need for spousal planning to protect both partners. Do you know what to do if your spouse needs nursing home care?

8. Informal Caregiver Burnout

The strain of caregiving can lead to caregiver burnout. Nearly 40% of caregivers for older adults experience significant psychological distress due to the demands of caregiving.

9. Limited Coverage by Health Insurance

Most health insurance plans, including Medicare, only cover a limited amount of long-term care costs, leaving individuals responsible for a substantial portion of their care expenses. Planning well in advance of needing care can help ensure you don’t lose your life savings to the nursing home.

10. Financial Impact on Families:

The cost of long-term care can pose a significant financial burden on families. It’s estimated that 15% of caregivers had to reduce their work hours or quit their jobs altogether to accommodate caregiving responsibilities. The good news is that many caregivers can qualify to receive compensation for their caregiving responsibilities—ask us about how you can become a paid caregiver in Alabama.

These surprising long-term care statistics should serve as a wake-up call for individuals and families who want to plan for and secure their future. Being proactive and exploring options like long-term care insurance, setting up a Medicaid Asset Protection Trust, or consulting with an elder law attorney can help protect your assets and ensure a secure future. By planning well in advance, you can alleviate financial stress and focus on providing the best possible care for yourself or your loved ones. Remember, the time to plan is now—and we can help!

If you or a loved one is getting close to nursing home age, contact us to learn your options, and get a plan in place for the future. Call (256) 251-2137 or contact us using the brief form below:

Contact Miller Estate and Elder Law

Looking to learn more? Do not hesitate to give us a call at (256) 251-2137 or contact us via the brief form below.

Subscribe to Our Blog

When to Form a Medicaid Asset Protection Trust

When to Form a Medicaid Asset Protection Trust

house shaped cookie cutter with lock and money

If you’ve been following our blog, you’ve learned that—with a little planning—even middle-class American homeowners can qualify for Medicaid coverage. You’ve started exploring your options, and maybe you’ve even heard of Medicaid Asset Protection Trusts. This powerful legal tool could help you gain the long-term care coverage you’ll likely need in old age…but the sooner you start planning, the better.

What You (Really) Need to Know About Medicaid Asset Protection Trusts

Medicaid Asset Protection Trusts (MAPT) are a special type of irrevocable trust designed to shield assets from being counted as part of your Medicaid eligibility determination. When properly designed, they allow you to transfer assets out of your name, and remove them from your personal ownership. On paper, you cease to be the owner of whatever you place in the trust, while still retaining certain benefits and some control over everything you’ve worked a lifetime to earn. The primary objective with a MAPT is to protect your life’s work from being depleted to pay for nursing home costs (which can be exorbitant).

How Medicaid Asset Protection Trusts Work

When a MAPT is created, the individual—known as the grantor—transfers assets into the trust. The grantor names a trustee (either a trusted loved one or professional advisor) to manage the trust and make distributions according to the trust’s terms, which you set. By transferring assets into the trust, you, the grantor, effectively surrender ownership, yet retain control by virtue of determining how the assets can and cannot be used. Since Medicaid has a look-back period of five years, all of this needs to happen far in advance of when you anticipate needing Medicaid coverage. This will help you avoid penalties.

When to Get Started on Your Medicaid Asset Protection Trust

There are two common situations in which you might need a MAPT:

  1. Planning for long-term care: If you anticipate the need for long-term care in the future, creating a MAPT early helps safeguard your assets and avoid penalties.
  2. Preserving family wealth: By establishing a trust, you protect your assets from being spent down to cover nursing home expenses, ensuring that your loved ones can inherit your wealth…and not the nursing home.

A Medicaid Asset Protection Trust provides a strategic means to protect your assets while ensuring you remain eligible for Medicaid benefits. By transferring your assets into this type of irrevocable trust, you safeguard your life’s work for your family’s future benefit, while making sure you have access to the care you need. If you’re considering establishing a MAPT, it’s important to work with an experienced estate planning attorney who can steer you clear of pitfalls and penalties that are otherwise hard to avoid.

Contact Miller Estate and Elder Law

Looking to learn more? Do not hesitate to give us a call at (256) 251-2137 or contact us via the brief form below.

Subscribe to Our Blog

What is a Medicaid Crisis and What Are Your Options?

What is a Medicaid Crisis and What Are Your Options?

Imagine that your parent or another aging loved one suddenly finds themselves in need of nursing home care. If they haven’t already planned for the potential cost of long-term nursing care, they could find themselves in an incredibly compromised and vulnerable position. Because of the strict income and asset limitations that dictate who is eligible for Medicaid, your parents (or even you) may end up blowing through your life savings in order to pay for the cost of long-term care.

It is well known that Medicaid has a 5-year lookback period, so those who find themselves in immediate need of long-term care often assume there is nothing they can do to get qualified.

Fortunately, that is a myth. With the help of a qualified elder law attorney, Medicaid Crisis Planning could help you or your loved ones preserve some of their assets while becoming eligible for Medicaid.

What is Medicaid Crisis Planning?

About 70 percent of American seniors will need some type of long-term care planning, many of whom will find themselves in nursing homes. Because of the high nursing home costs—the median annual cost of a private room in a nursing home is over $100,000—it is important to meet with an elder law attorney to work out a detailed plan to prepare for this situation long in advance.

If, however, you find your loved one facing an unexpected health emergency that will likely require nursing home care, you do have options. For people who have assets significantly higher than the Medicaid threshold, the best of these options is Medicaid Crisis Planning. Medicaid Crisis Planning is a way to avoid spending down your entire life savings when faced with an immediate or near-immediate health situation.

How Does Medicaid Crisis Planning Work?

With Medicaid Crisis Planning, the person facing a nursing home visit gifts a large part of their assets—sometimes up to 50 percent—to a Medicaid Asset Protection Trust, or in some cases directly to a child or another loved one. The rest of the person’s assets are then converted to an income stream through a Medicaid Compliant Annuity (or in some states a promissory note) After these transfers are completed, the patient applies for Medicaid to cover the nursing home cost.

In most cases, the application will be approved subject to a penalty period.  That penalty period is based on the amount of the gift they have made to their child or other loved one (and any other transfers for less than fair market value that have been made in the past 5 years). During this period of ineligibility, (penalty period) the person will privately pay for nursing home care using their monthly income, as well as the funds produced by the annuity or payments from the promissory note or annuity. Once the ineligibility period has expired, Medicaid will start paying the monthly nursing home bill.

While the applicant will need to use some of their life savings initially, in the long-run, they will be able to salvage some of what they’ve worked a lifetime to accrue.

Long-Term Care Planning

With proper long-term care planning, you and your loved ones can be protected from having to spend down your entire life savings when faced with an unexpected nursing home admission—without the need for Medicaid Crisis Planning. An elder law attorney will help you protect your assets and guide you through which financial moves to make (or NOT make) as you age. For example, it may be advised that you set up a Medicaid Asset Protection Trust or purchase assets that are exempt from Medicaid.  This can prevent you from incurring a penalty, should you need to apply for nursing home Medicaid in the future.

The sooner you start planning for the cost of long-term nursing care, the better.  As it goes, an ounce of prevention is worth a pound of cure.

Whether you are interested in long-term care planning or find yourself in need of Medicaid Crisis Planning, it is important that you work with an experienced estate and elder law attorney. Elder law matters are as complicated as they are essential, so choosing the right professional can make all the difference.

At Miller Estate and Elder Law, we have many years of experience with long-term care planning and Medicaid Crisis Planning. Call (256) 251-2137 to speak with a member of our legal team today or contact us using the brief form below.

Subscribe to Our Blog

How to Care for Someone with Dementia: Guardianship/Conservatorship for Parents

How to Care for Someone with Dementia: Guardianship/Conservatorship for Parents

how to care for someone with dementia

As our parents and loved ones grow older, they become the target of scammers and con artists across the globe. This is especially scary if your parents have developed dementia, Alzheimer’s, or another form of mental incapacitation. Knowing how to care for someone with dementia—and how to protect them—isn’t always straightforward, and sometimes legal intervention is required. If you are not named the agent on a preexisting power of attorney document, having an elder care attorney help you set up a guardianship/conservatorship may be the best way to make sure your parent’s finances are safe from predators.

When considering how to care for someone with dementia, it’s important to remember that they are a much easier target than most due to memory loss, confusion, and not being as mentally present as they used to be.

One of the best resources available to help you tackle the legal and financial planning issues that arise with the elderly is to engage the services of an elder care attorney, or a law firm that specializes in elder law. Working with a qualified attorney will ensure you have what you need to protect your parents and aging loved ones.

However, with or without a lawyer, you should know how to care for someone with dementia, as well as how to recognize the warning signs that your aging loved one has fallen victim to a scam:

Common Scams To Be Aware Of

Some of the most common scams that target the elderly, as well as those with conditions like dementia and Alzheimer’s, are:

  • Fake lotteries and sweepstakes that ask for money upfront for prize collection or entrance fees
  • People posing as representatives from government agencies like Social Security, Medicare, or the IRS
  • Bogus discount prescriptions and medical equipment
  • Credit card fraud
  • The “Grandparent Scam” where someone will claim that a grandchild is in trouble and needs money
  • Investment schemes
  • And others…

Signs To Look Out For

Guarding against those who would abuse our elders is a big part of how to care for someone with dementia. The following are some of the many signs of suspicious activity to be wary of:

  • Unusual monthly charges on bank and credit card statements
  • Out-of-the-ordinary calls from companies, utilities, government agencies, or charities requesting money in an unusual way
  • Callers who pressure you to make immediate decisions, ask for a lot of personal or financial information, or demand payment in unusual or specific ways
  • Official-looking emails, letters, bills, offers, etc. with spelling and grammar mistakes, or that seem out of place

What You Can Do?

If you have a parent who has Alzheimer’s or dementia—or some other form of incapacity—and they’re having a difficult time making decisions, or are getting taken advantage of, you may want to contact an elder care attorney about getting a guardianship or establishing a conservatorship over their finances. If your aging loved ones are not able to manage their own care or money, an elder law attorney can help you navigate the process of stepping in and protecting them.

Download our Free Guide: Caring for Aging Loved Ones

If you need to protect your own aging parents or loved ones, start by downloading our free guide: Caring for Aging Loved Ones: The ABCs of Long-Term Care Planning or by calling our elder law firm at (256) 251-2137. Our team is here to help guide you through the process of planning for long-term care, and setting up guardianships and conservatorships when needed.

Contact Miller Estate & Elder Law

Subscribe to Our Blog