What is the Medicaid look-back period?
The look-back period is the 60 months (5 years) before your Medicaid application during which the state reviews all asset transfers. Gifts or below-market transfers in this window create a penalty period of ineligibility. California historically used a shorter 30-month window.
How is the Medicaid penalty period calculated?
Divide the total amount you gifted by your state's penalty divisor (the average monthly private-pay nursing home cost). For example, a $90,000 gift divided by a $9,500 divisor equals about 9.5 months of Medicaid ineligibility.
When does the Medicaid penalty period begin?
The penalty starts when you are otherwise eligible for Medicaid and applying, not on the date of the gift. This means the penalty can begin at your most vulnerable and expensive time, when you have already spent down and need care.
Can I avoid the look-back penalty?
Transfers made more than 5 years before applying are not penalized. Certain transfers are exempt, such as to a spouse, a disabled child, or a caregiver child in some cases. Planning tools like certain trusts and annuities may help, but require an elder law attorney.
Does Canada have a look-back period?
No. Canada has no Medicaid and no gifting look-back for standard long-term care because subsidies are income-tested, not asset-tested. Gifting there does not delay access to publicly funded care, though it has tax consequences.