The Medicaid Five-Year Look-Back Period
Learn how Medicaid reviews certain asset transfers before long-term-care eligibility and why families should plan carefully.
For many Medicaid long-term-services applicants, the state reviews transfers made during the 60 months before application. A gift or sale for less than fair market value can result in a penalty period during which Medicaid will not pay for covered LTSS.
Transfers that can raise questions
- Cash gifts to children or other relatives
- Adding another person to a deed or account without receiving fair value
- Selling property below market value
- Paying a family caregiver without a valid agreement and documentation
- Moving assets into an arrangement that does not meet an exception
How the penalty is generally calculated
The state typically divides the uncompensated transfer amount by a state-specific average private-pay cost of nursing-facility care. The penalty generally begins under rules set by federal law and state implementation—not necessarily on the date of the gift.
Do not “give everything away”
Informal asset transfers can create a care-funding gap, tax issues, loss of control, family conflict, and possible ineligibility. Get individualized legal advice before transferring property.
Important exceptions may apply
Transfers to a spouse, certain disabled individuals, or in specific home-transfer situations may receive different treatment. Documentation and exact facts matter.
What to collect now
- Five years of bank and investment statements
- Property deeds and closing documents
- Records of gifts, loans, and major withdrawals
- Caregiver contracts and payment records
- Trust, annuity, insurance, and funeral documents
This page provides general educational information, not legal or benefits advice. Medicaid rules and program availability change. Verify current details with the appropriate state agency and qualified professionals.