It is important to understand that Medicaid, unlike SS claiming dates, ACA qualifications and Roth conversion tables, is a government program only intended to provide a last ditch safety net for only the poorest of the poor. There are many, many people who genuinely have no or very limited assets and who desperately need the services that medicaid provides. Further, medicaid already places a significant and increasing burden on taxpayers. The tangible consequence of that burden is that lawmakers are looking to cut medicaid benefits which inevitably results in decreased quality of care for medicaid recipients.
Medicaid was never intended to provide benefits for individuals for those capable of paying for their own care. The entire purpose of the lookback is to avoid schemes, legal or otherwise, to prevent persons from transferring assets in order to place the burden of their care on the taxpayers, instead of using their own assets to pay for their own care. While medicaid eligibility rules differ from state to state, all states allow for the retention of assets, including a house, by a spouse.
Frankly, I believe the lookback period should be substantially longer that 5 years to prevent some the schemes that are being used to essentially shift the cost of care from individually who are financially capable of paying their own way to other taxpayers.
You provide a cogent rationale for why some people who could well afford to finance LTC should not be beneficiaries of Medicaid assistance. On the other hand, this rationale can be applied to numerous Government benefit programs (including tax subsidy programs) where precise lines of only capturing the most deserving, intended beneficiaries are virtually impossible to conceive or draw. For example, when unemployment was extremely high a few years ago, many unemployed used the Social Security Disability Income program in a manner not fully intended by the program. And of course, we have never means-tested Social Secruity retirement benefits so that those truly in need benefit the most. From my point of view, I don't see the difference in taking full advantage of Medicaid, Social Security programs, tax exemptions or subsidies, etc.
To me, I see hypocrisy when folks take full advantage of some government benefit program by running through various chutes and ladders and then rail against others taking full advantage of Medicaid by going through its chutes and ladders.
I think there is something more basic in the sense of indignation that some folks have when assessing the perception of unfairness that people see when others take advantage of Medicaid assistance by "sheltering assets." It's not grounded in rationale thinking, in my view, but it's more emotional like the sense that someone is gaming the system to your detriment. I can understand how it could be bothersome, but it is kinda of hypocritcial when you're also gaming or using the system to your benefit.