The Medicaid 5-year look-back period is a 60-month review of asset transfers made before a person living in a nursing facility applies for Medicaid. For dementia families, it decides whether gifts or sales for less than fair value will delay Medicaid payment for long-term care.
Federal law sets the review at 60 months for disposals made on or after Feb. 8, 2006, measured before the person both lives in an institution and applies, according to Cornell Legal Information Institute and its text of the federal transfer statute. The rule focuses on transfers that reduce countable assets without fair payment in return.
Medical information disclaimer: This article is for general educational purposes only and does not provide medical advice, diagnosis, or treatment. Always consult a physician or other qualified health professional about symptoms, medications, tests, or treatment decisions.
Official resources:
- Check eligibility on Va’s official study page — Use this page to check the study’s participation requirements.
- Apply through Cornell’s official page — Use this page to review requirements and apply directly.
Table of Contents
- Which transfers get reviewed?
- How long does the payment delay last?
- Which transfers avoid a penalty?
- Why do state rules change the result?
- How should dementia families plan ahead?
Which transfers get reviewed?
The rule affects institutionalized applicants and spouses who give away assets or sell them for less than fair market value. It can block Medicaid payment for nursing-facility services, the same level of institutional care elsewhere, and home and community waiver services.
Reviewers look at cumulative uncompensated value moved during the look-back window. A birthday gift, a house signed over to an adult child, and a car sold far below market price all fall in the same review group when the seller receives less than fair value.
How long does the payment delay last?
The penalty does not start at the transfer date alone. For transfers after Feb.
8, 2006, it starts on the later of the transfer month or the date the person qualifies for Medicaid and would receive institutional-level care except for the penalty. Penalty length equals total uncompensated transfer value divided by the state average monthly cost for a private-pay nursing-facility patient at application. Separate penalty periods do not overlap, so one delay runs before the next begins.
Which transfers avoid a penalty?
Some family and disability-related transfers carry no penalty under federal rules. The American Council on Aging describes these penalty-free transfer rules in its look-back guide.
Keep deeds, bank records, care notes, and proof of residence for any claimed exemption. The exemption fits only when the recipient, residence history, and care facts match the federal category.
- transfers to a spouse, or to another person for the spouse
- transfers to or for a blind or disabled child
- transfer of a home to a minor or disabled child
- transfer of a home to a sibling who holds equity and lived there with the applicant
- transfer of a home to a caregiver child who lived there and gave care for at least two years
Why do state rules change the result?
States apply the federal floor in different ways. New York historically applied look-back and penalty rules to nursing-home care while its 2020 law to add a 30-month community-care look-back stayed pending federal and operational rollout, as reported by NY Health Access and NYLAG in New York Medicaid update. Medicaid covers nursing-home care for eligible adults age 21 and older.
It may cover home and community services only when the person would otherwise need nursing-home care, with details set by each state, according to the U.S. Dept. of Veterans Affairs Geriatrics and Extended Care and its Medicaid long-term care guide. Dementia families should check whether their state reviews transfers for waiver services as well as facility care.
How should dementia families plan ahead?
Start early because dementia often creates a long gap between diagnosis and facility care. Avoid rushed gifts once nursing care looks near, and keep a dated list of every transfer, sale price, appraisal, and recipient. Ask the state Medicaid office which services face review in your state before you move assets.
- gather five years of bank, deed, and gift records
- pause new gifts or below-market sales before applying
- confirm your state divisor and covered services
- match any planned home transfer to an exact exemption
- bring records to application instead of rebuilding them later
