The MassHealth Look-Back Period and How it Affects Your Future

Do you remember how much money you had five years ago? Do you know how much you’ll have in five years?

Unless you keep meticulous financial records and have a crystal ball, you probably can’t say yes to both questions. Here in Massachusetts, five years is a significant time period. That’s the length of the look-back period that MassHealth uses when considering a resident’s eligibility for nursing home care.

Let’s say your health is worsening and your doctor says that you’ll soon need long-term care in a nursing home. When you apply for MassHealth (what we call Medicaid here in Massachusetts), you’ll have to meet certain criteria in order for the program to cover your care costs. One of the things that MassHealth will look at is your last five years of financial records. If you have too much money, or had too much money but gave it away, MassHealth will deny your application.

That might sound unfair or cruel – after all, it was your money to spend! Keep in mind that long-term care is extremely expensive, and MassHealth wants to make sure that only people who can’t shoulder the burden themselves receive coverage. These policies are in part intend-ed to keep applicants from giving away their assets right before they need coverage in order to force Massachusetts to pay the bill.

So what happens when you submit your application? MassHealth will look at every one of your bank statements, going back five years from the date of your application. (MassHealth isn’t allowed to look at bank statements that date back more than five years.) All your transactions will be studied to make sure you didn’t give away significant amounts or transfer money to other accounts. If you gave away large assets during that five-year period – like if you gave your kids large financial gifts or property – you’ll be ruled ineligible and have to wait to apply again until at least five years have passed from the date of the gift.

The look-back period makes a lot of Massachusetts residents ineligible for MassHealth, and it could do the same to you. Maybe you’re not planning to need long-term care anytime soon – but then you’re injured or receive a devastating diagnosis that moves up those plans. If your financial moves during the five-year look-back period make you ineligible for MassHealth coverage, will you have the resources to pay for private care until you do become eligible? If not, will you have to sell your assets (like your home) to pay out-of-pocket for that care? Will you have any-thing left to leave to your loved ones?

Those are frightening what-ifs. But if you’re not in need of long-term care yet, you still have time to get your financial affairs in order. It’s time to start estate planning and looking ahead to your financial future.

That’s what we specialize in at Ladimer Law. Our attorneys can help you prepare your estate and, if necessary, prepare to become eligible for MassHealth when the time comes. Contact us today to schedule a consultation.