If you’re getting ready to retire, it’s important to understand the 5-year lookback provision. This video from Elder Law Attorney Irina Yadgarova explains what this is and how it could impact your retirement planning.
Wed, Nov 30, 2022 1:40PM • 9:16
Irina Yadgarova, Michael Levitis
Michael Levitis 00:05
Welcome back, everybody. This is Michael Levitis from JurisQ.com with Irina Yadgarova. Irina, welcome back.
Irina Yadgarova 00:12
Hello, thank you so much for having me.
Michael Levitis 00:15
Of course, Irina, you are our go-to person for trust and estates, for elder law, for Medicaid trust, for retirement planning. What we do here is we educate people on various issues in your area, and frequently people ask you at your consultation, they ask on Google, what is a five year look back provision concerning Medicaids? It’s sort of confusing, but I know you’re gonna do a good job explaining us in a laypersons terms. Irina, what is it?
Irina Yadgarova 00:53
I’m so glad that we’re going to talk about this because there is a lot of confusion and misconceptions. I hope this would be a clear way of everybody to understand in layman’s terms, like you said, what is the five year look back? Five year look back is essentially, if a person needs to apply for nursing home Medicaid coverage only. That is the only time where it applies. It does not apply for Medicaid, home care for any kind of coverage. So if a person needs skilled care for over 90 days, that is where institutional or nursing home Medicaid kicks in. Pursuing to their policy, Medicaid cannot cover skilled care or the permanent nursing home if a transfer was made within five years of that application.
Michael Levitis 01:49
Transfer to a trust, correct, or something else?
Irina Yadgarova 01:50
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That’s an excellent question. It’s any uncompensated transfer, which can mean to a trust or just a straight out gift, or anything that just disappeared from your account and you can explain where it went like you withdrew $10,000 worth of cash. Okay, do you have a receipt for it? Where did it go? There are certain exemptions exclusions. But in New York City, nursing home Medicaid eligibility will look at any transfer, it’s supposed to be by law, any transfer for any amount. But in New York City, they specifically so far have been looking at only $2,000 or more, anything under my see not in Long Island, those counties are stricter than NYC, they will look 2$,000. So if you took out over $2,000 worth of cash or gifted over $2,000, to a trust or to a person that will be included in that look back period.
Michael Levitis 02:47
So for me to understand it better, if I want to qualify to get nursing home coverage, which by the way is very expensive, right? How much could it cost per year to be in a nursing home?
Irina Yadgarova 03:01
This is the perfect question, because what does that mean? So let’s say they look back to your five years, right? What are they looking for, they look to see exactly how much you transferred within that five years within 60 months. That value of what you transferred will determine how long they will not cover you for. So New York, they have a regional rate, they publish regional rates every year, I believe the most current one in NYC and every county has a different rate. So let’s use like Manhattan, I think somewhere like an average of 13,600 a month was the last figure I saw, you will divide the value of what you transferred by 13,600. Whatever number you get, that is the number of months Medicaid will not cover you for nursing home care, because you could have used that money, that exact period of time to cover yourself.
Michael Levitis 03:51
Nursing home is very expensive. So you don’t want to hurt yourself by those who have a transfer, you think you’re gifting to somebody, you’re transferring property to a trust or what have you.
Irina Yadgarova 04:06
That goes through what people think, Okay, well, then why would I transfer, because I’m going to have this penalty? Well, if you don’t start, if you don’t trigger the five year look back today, you’re gonna get those assets confiscated by the nursing home anyway, so your goal is to get this five year out as soon as you can. So it no longer applies to you.
Michael Levitis 04:25
So what you’re saying is, it’s best to have your trust documents or whatever else you need, ahead of time more than five years before they may have to go to nursing home. So this is why it’s so important, what we are doing here is we’re educating people because these are common mistakes that people commit, people don’t think about the future, people don’t think about what’s going to happen two years from now. You want to think about it we discussed about happy things, right? They don’t want to think about unfortunate circumstances where part of life you may end up in a nursing home, and that’s why it’s so important to contact an attorney like yourself. First of all, before you make any transfers to talk about how they should be done, and what form, how much and when. Second of all, to set up the right mechanisms, purchase trust, ahead of time, so that you are fully prepared and ready and your next of
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kin, even your kids and other relatives don’t have to bear the responsibility for such expensive nursing home accommodations.
Irina Yadgarova 05:37
Right. I’ve been talking about this, everybody in the Elder Law community is talking about this, there is a new two and a half year look back penalty that was enacted, that will be effective sometime in 2024 for home care, because remember, the only penalty period look back period in New York currently is for nursing homes and it’s been five years for many years. There’s been legislation on the table to extend it to 10 years, it didn’t pass, thankfully. But the legislation did pass that there will be a two and a half year look back for homecare, for a home health aide, for a home attendant for home care coverage, so that’s going to be two and a half years, 30 months look back. That’s why it’s important to plan ahead for homecare that is enough, more than ever before, because there was no look back and there is no implementation until 2024. But we know that the law was enacted. So sometimes, and they keep pushing it back to implementation. But the law was enacted in 2021.
Michael Levitis 06:42
That’s a very good point to know. So again, nursing homes will five year look back and home attendant care, which is also very important. Probably more people are getting homecare than nursing homes, that’s even more important. There is a two and a half year provision you’re saying, so that you better be prepared two and a half, three, four years before you think you may need a home attendant?
Irina Yadgarova 07:07
Yeah, and it’s gonna be the same. So if you’re applying for Medicaid, within that period of time, again, 30 months for homecare, 60 months for nursing home that 60 months has already been for many years. Two and a half year look back is starting sometime in 2024. Nobody announced the exact month. It could be April could be October. We’re not sure.
Michael Levitis 07:29
But it’s coming. Listen, I appreciate your time and it’s so important to stress. for people, but what we’re doing now and this video is not just for people who are about to retire. This is also for their children, who may be our age.
Irina Yadgarova 07:47
For their children, because nobody’s going to kick you out of your home, they’ll just put a lien on it or recover it after your death. If you’ve got home care. This is for the kids. This is for if you want to protect fully the value of your hard earned assets for your children. Whether or not I mean, the children could take initiative here too, whether or not thet are paying for it. It’s for their benefit, but depends on the dynamic.
Michael Levitis 08:10
By the way, Irina, we just did a video, a very important video last month, where you stress the importance of getting everybody in one room. Meaning you’re the children and the people who are actually making the choice to have that estate to pass on. Because you want everybody informed, to be on the same page. To have no surprises down the road. So if anybody’s interested, take a look at
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our previous video with Irina Yadgarova on the importance of getting everybody in one room. Irina, it was a pleasure to have you in one room, in one Zoom-room today. We’re going to come back to you again next month with more questions more FAQs on trusts and estates on Medicaid and retirement planning. If anybody has any questions on your particular case, any situation, the phone number for Irina Yadgarova is on the bottom of the screen. Also you can message us and we can ask these questions now follow up sessions with Irina. Everybody, thanks so much for your time. Irina, I really appreciate. Have a good day.
Irina Yadgarova 09:11 Thank you so much, be well.