When you are preparing your long-term health care plan in Colorado, the Medicaid look back period may present an obstacle. While some people never need to worry about it, there are many that do. We at Vincent, Romeo and Rodriguez want you to be ready for anything so we make sure to educate our clients about this confusing topic.
Forbes states that if you are in a nursing home or in need of long-term care, your Medicare insurance and assets will be used to pay for those until they run out. At that point, Medicaid will take over the costs. This plan can be frustrated if you have assets that you wanted to leave to your loved ones. Before Medicaid will begin covering your bills, you must have used all available funds, no matter what they were intended for.
The look back period prevents you from getting rid of all assets in order to qualify for Medicaid. When you apply for coverage, administrators will look at all fund transfers that occurred over the 60 months previous to the application. These will be subject to penalties.
One way to solve this problem is to distribute the assets more than five years before you anticipate applying for Medicaid, but this still comes with complications. One issue is that you will have to pay gift tax on any transfer over a set amount, generally around $14,000. To learn more about how to overcome this obstacle as well as any others that may arise with the Medicaid look back period, visit our web page.