Medicaid 5-year look-back for nursing home care

Quick answerMedicaid, not Medicare, is what pays for long-term nursing home care for people with limited assets. When you apply, the state looks back 60 months for gifts and other transfers for less than fair value; such transfers can cause a period when Medicaid won’t pay for nursing home care. Medicare covers only limited skilled nursing stays.

The look-back

States must apply a penalty when an applicant or spouse disposes of assets for less than fair market value on or after the look-back date, which is 60 months before applying for transfers after February 8, 2006. Source: 42 U.S.C. § 1396p(c)(1)(A)–(B), checked Oct 29, 2026.

How the penalty is calculated

Months of ineligibility = total uncompensated value transferred ÷ the average monthly private-pay cost of nursing home care in the state (the state’s “divisor”). States may not round fractional months down. Example: with a $10,000 divisor, a $50,000 gift means about 5 months of no Medicaid nursing home coverage.

Penalty months equal the uncompensated value divided by the average monthly private-pay nursing facility cost in the state; fractional periods may not be disregarded. Source: 42 U.S.C. § 1396p(c)(1)(E), checked Oct 29, 2026.

Transfers that are exempt

Transfers to a spouse, or for the spouse’s sole benefit
Transfers to a blind or disabled child, or a trust solely for that child
The home transferred to a spouse, a child under 21, a blind or disabled child, a sibling with an equity interest who lived there at least 1 year, or a caregiver child who lived there at least 2 years and provided care that kept the parent at home
Transfers to certain trusts for a disabled person under 65

Exempt transfers, including the caregiver-child home exception. Source: 42 U.S.C. § 1396p(c)(2), checked Oct 29, 2026.

The $19,000 gift tax exclusion does not protect you

The IRS annual exclusion is a tax rule. Medicaid has no matching exception, so a gift that needs no gift tax return can still trigger a Medicaid penalty.

Trusts

Assets in a revocable trust count as yours. For an irrevocable trust, any part that could be paid to you counts as available; parts that can never be paid to you are treated as transferred when the trust is set up, so the look-back applies.

Treatment of revocable and irrevocable trusts. Source: 42 U.S.C. § 1396p(d)(3), checked Oct 29, 2026.

Pilot states

Each state Medicaid agency sets its own divisor and procedures. We have not yet verified the current figures for New Hampshire, California, Texas, Florida or Ohio from the state agencies, so we don’t list them. California has its own transition rules and is not summarized here.

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