Health care plans provide access to medical care and other necessities and reduce out-of-pocket health-related expenses. Each plan is different, and depending on where you live, your coverage may vary.

People quickly find that many healthcare plans do not include provisions for long-term health care, such as paying for nursing facilities. Understanding how health plans work and learning about potential financial reviews for nursing home payment qualification is a good idea for anyone concerned about financing their future health care needs.
Health care basics

Canadian citizens or permanent residents of Canada have access to a universal health care system that is paid for through their taxes, according to the Government of Canada. Each province or territory has its own health insurance plan that covers a variety of services.

In the United States, health care is largely privately managed, with most employers offering access to various health coverage plans. Government subsidized plans include Medicare, which is for retirement-age individuals and younger people with disabilities. Medicaid is a joint state- and federally-run government program that provides health coverage to low-income individuals and families.

Just as in the United States, health insurance in Canada does not pay for nursing home care in most cases. In the United States, unless an individual meets low-income criteria, nursing home care is paid for by the resident; otherwise, people who qualify for Medicaid can have their nursing home expenditures payed for by that program. To receive Medicaid assistance, applicants should expect a financial review, including a look-back period.
What is the look-back period?

The senior health, finance and lifestyle resource Senior Living advises that Medicaid is a “last resort” method of financing nursing home costs. Individuals are expected to use other means of payment first and “spend down” their assets. When financial resources dwindle, Medicaid will kick in to provide coverage.

To ensure that individuals simply do not transfer money out of their accounts to avoid paying for nursing home care by their own means, Medicaid requires a look-back period into applicants’ finances to determine if there were any violations to rules regarding asset transfers.

Most people engage in some sort of long-term planning to protect a portion of their assets so that they can be used to support spouses or children. According to rules, an applicant is permitted to transfer certain monies to his or her spouse, provided the spouse isn’t also applying for long-term care through Medicaid. Most money and tangible asset transfers (check with your state Medicaid office for the most current rules) must have taken place 60 months (5 years) prior to application for Medicaid. Penalties will be instituted when rules are broken, namely gifts or asset transfers that take place within the look-back period. This could delay Medicaid acceptance.

Paying for long-term care can be complicated business with look-back periods and required spend-downs. It is in a person’s best interest to seek the guidance of a financial planner who specializes in elder care to navigate these financial waters.