Good afternoon, it’s Wade Scott with the Delaware Elder Law center and this is a video segment talking about a specific issue that arises in all Medicaid application cases.
What I will talk about is the five-year look back rule. It’s something you hear about in the community all the time, and no one quite has the operation of the rule down correctly so I thought I’d do a video on it. So the five-year look back rule is simply a requirement to report on the application all the gifts that the applicant has made in the preceding five years leading up to the date of the application.
Hey, Medicaid doesn’t like it when you give assets away. When you do give assets away you’re penalized for it, and so the way the world works is this: just imagine this ruler is five years, this is today. When the application is filed today, that triggers the duty to report all the gifts made in the preceding five years, so when you apply Medicaid looks back five years and on the application you’re required to report all the gifts made by the applicant in the preceding five years.
The next step is to total the amount of gifts in the past five years and divide by the average cost of long-term care monthly and that’s a Medicaid number. I’m going to round up just a little bit and so that number is $10,000 a month. Divide the total by $10,000 and you get the number of months that the applicant must continue to pay full price for their care because they gave assets away. So in some read the five year look-back is just a reporting requirement and we’re trying to calculate the length of the waiting period. The length of the waiting period is based on the number of assets given: the more given away the longer the period. That’s it. It isn’t any more complicated than that. Thanks so much.