Medicaid Five-Year Look-Back Period — 60-month look-back

When you apply for Medicaid to cover nursing home care, the state reviews your financial transactions for the prior 60 months. This Five-Year Look-Back is designed to prevent people from giving away assets shortly before applying in order to qualify faster.

Any gift, transfer, or sale of cash, real estate, investments, or other property for less than fair market value during the 60-month window can trigger a penalty. The penalty is not a fine. Instead, Medicaid delays coverage for a calculated number of days, during which you must pay privately.

The penalty period is calculated by dividing the total disqualifying transfers by the state's average daily nursing home cost. If you gave away $60,000 and the state's daily rate is $300, the penalty is 200 days during which Medicaid will not pay for your care.

Important exceptions exist. Transfers to a spouse are never penalized. Transfers to a disabled child are protected. Transfers to a caregiver adult child who lived with you and kept you out of a nursing home for at least two years may also be protected. Most states apply the look-back only to nursing home Medicaid, not to home and community-based services waivers.

If long-term care is on the horizon, talk to an elder law or Medicaid planning attorney well before the five-year window. Assets transferred, placed in compliant trusts, or spent on exempt items more than five years before application are fully protected.