Where to start › When the money runs out › The look-back
The five-year look-back
When someone applies for long-term-care Medicaid, the agency reviews their recent financial history to make sure assets weren't simply given away to qualify. This is the "look-back period," and it catches a lot of well-meaning families off guard.
How it works
In most states, Medicaid reviews the 60 months (five years) of financial records immediately before the application. Gifts or transfers for less than fair value during that window — money to a grandchild, a house signed over to a child, a "loan" that looks like a gift — can trigger a penalty period during which Medicaid won't pay, even though the money is already gone. (California is an exception; it has been phasing out its asset test and look-back — one more reason the details are state-specific.)
Source: the federal transfer-of-assets rules under Medicaid, described at Medicaid.gov. The exact penalty math uses a state-specific "penalty divisor," and states administer the rules differently.
Why this matters so much
The look-back is exactly why the instinct to "give the house to the kids" before applying can backfire badly. It is also why families who plan early — well before the five-year window matters — have more legitimate options. Either way, transfers and gifts in this context are a conversation to have with an elder-law attorney before anything moves, not after.
Where the public record stops — and who to ask
Would a past gift or transfer create a penalty, and what are your state's specifics? That answer depends on your state and your situation, and it belongs to the people who decide it — not to us. Here is who has it, and exactly what to ask so you arrive prepared instead of lost.
Who to ask: an elder-law attorney who knows your state's Medicaid rules; your state Medicaid office for the official process.
What to ask them:
- Does my state use the 60-month look-back, and how is a penalty period calculated here?
- We made a gift/transfer in the last five years — does it count, and what can we do?
- What transfers are exempt (for example, to a spouse or a disabled child)?
- Given our timeline, is early planning still possible?
You now know more than most people who walk into that office. That is the whole point of this page.
Who helps you locally — free, and on your side. You do not have to figure this out alone. Your Area Agency on Aging gives free options counseling; reach any of them through the federal Eldercare Locator at 1-800-677-1116 or eldercare.acl.gov (Administration for Community Living). More on the four people who help — and what each one does — on Who helps me locally.