Finances are among the most significant issues when seniors and their. Many people rely on Medicaid as a vital resource to pay for care, but most seniors have assets beyond the strict eligibility limits. While there are ways to manage assets and gain eligibility, you must be careful. Florida Medicaid has a look-back period to ensure people don’t intentionally deplete their assets to gain eligibility. What is the medical look-back period in Florida, and how does it work? This post explores these issues.
The Basics of the Medicaid Look-Back Period in Florida
When people realize their assets are over the Medicaid limit, they look for ways to offload assets. The obvious thought for many is to gift or sell assets to family members for a bargain. The idea is that it can help you gain eligibility while doing something nice for a loved one. It may also allow you to maintain some access to the assets.
While that might sound like the perfect solution, it may run afoul of the Medicaid look-back period. When you apply for Medicaid, the office will review transactions during the look-back period. In Florida, the look-back period is 60 months. The review looks for transactions involving gifts or sales below the market value during the 60 months before your application.
Medicaid examines bank records, property sales, and asset transfers during the look-back period. If it discovers improper transfers, it might penalize the applicant.
The Penalty Period
The penalty for improper transfers during the look-back period is a period of ineligibility. Medicaid bases the length of the penalty period on the total value of all improper transfers. Each state has a penalty divisor, which is supposed to represent the monthly cost of nursing home care. Medicaid takes the total value of the assets and divides it by the penalty divisor. The result is the length of the penalty in months. Florida’s current divisor is $10,438.
If you gifted a relative $20,000 and sold property for $40,000 below market value, you have $60,000 in improper transfers. The result would be a penalty of roughly 5.75 months of ineligibility. Additionally, the penalty does not begin from the time of the transfer. Medicaid starts the penalty period from the date of your application.
Transactions and Assets
During the look-back period, Medicaid looks for improper transactions on countable assets. Some assets and transactions may be exempt from Medicaid. Countable assets would include cash, investments, and real estate. However, your primary residence, a single vehicle, and some personal property may be exempt. Additionally, some transfers may also be exempt. For example, transfers to a spouse or disabled child may not trigger a penalty period. These matters can be complex, so it is essential to seek legal advice.
Do you need help with asset protection and Medicaid planning? Click here to contact the Scott Law Offices. We can help with everything from creating trusts to transferring assets. Reach out now to learn more!
