Is It True That the Medicaid Look-Back Is 36 Months in New Jersey?
FALSE — in New Jersey, the look-back period for long-term care Medicaid is 60 months (5 years).
When someone applies for Medicaid to cover nursing home or home-based long-term care, the state reviews financial records from the past five years. They look at every single account or asset you have (including accounts closed out within the last 5 years) in order to see if you gave away money or assets for less than fair market value. If you did and you cannot prove that you used the funds for the care of the applicant, then Medicaid imposes a penalty period — a delay in eligibility. The penalty is calculated using a penalty divisor which is based on the average cost of care. This number is adjusted every so often and each time the agency puts out a new divisor, it get reflected on a MEDCOMM or Medicaid Communication
Why People Think It’s 36 Months
- Outdated info: Before 2006, the federal look-back period was 36 months, but New Jersey now follows the 60-month rule.
- Different programs: Medicaid for health insurance (under the ACA) doesn’t have a look-back, which causes confusion.
What Happens If You Made a Gift?
If you gifted $50,000 to a relative within the last 5 years, and you apply for Medicaid eligibility in 2025, then since the New Jersey penalty divisor is $402.74 per day, or $12,250.01 per month, then you could face a penalty of about 4 months ($50,000 ÷ $12,250).
Bottom Line for New Jersey Residents
New Jersey applies a 5-year look-back period to long-term care Medicaid applications. If you’re planning ahead or already transferred assets, call our office to schedule a consultation with our office. The wrong move could delay or deny coverage.