May 17, 2023

What is the Medicaid look-back period?

Manny Cominsky

The Medicaid look-back period refers to the period of time before applying to Medicaid where a senior is barred from gifting or transferring away assets below market value simply for the purposes of bringing their asset levels below Medicaid’s asset threshold. The Medicaid look-back period is an incredibly important concept because in order to be eligible for Medicaid for senior care or senior living, a senior must (along with income based requirements and health based requirements) have below a set level of assets. Not only does each state set its own asset limit for Medicaid eligibility, but each state also has its own look-back period and its own set of penalties for violating its look-back period rules. 

Because violation of the Medicaid look-back period can have significant penalties, including barring the senior from applying for Medicaid coverage for a substantial period of time, it’s incredibly important to make sure that you or your senior loved one has not violated Medicaid’s look-back period before applying for Medicaid benefits. For this reason, it can be incredibly helpful to talk to a local elder law attorney or financial planner with Medicaid experience before applying for Medicaid. To learn more about the Medicaid look-back period, as well as notable exceptions to the rule and strategies for avoiding noncompliance, read our guide below or reach out to the Sunbound team here.

What Medicaid programs apply a look-back period?

As an initial matter, it’s worth clarifying that not all Medicaid programs apply a look-back period. Generally, a look-back period will be applied when seniors are applying for Medicaid programs that offer long-term care coverage, Home and Community Based Services waivers (known as HCBS waivers), and Medicaid assistance to pay for nursing home care. Other Medicaid programs for seniors, often referred to as regular Medicaid or by such names as “Aged, Blind, and Disabled Medicaid,” will generally not apply a look-back period. That being said, because it is so important not to run afoul of the Medicaid look-back period it’s vital to consult either a local Medicaid expert, such as an elder law attorney or financial planner, or to contact your local state Medicaid to confirm whether a look-back period will be applied. 

Make sure to consult a local Medicaid expert to find out how your state's Medicaid look-back period applies to your medicaid application.

When does the Medicaid look-back period start?

The Medicaid look-back period starts running from the date that the senior applicant applies for Medicaid coverage. So, for example, if you were to apply for Medicaid coverage in a state with a 5-year look-back period on the day that this article was published, May, 17, 2023, then your Medicaid look-back period would extend backwards to May 16, 2018. This means that your state Medicaid agency will review all asset transfers, including those made by your spouse, within that period to make sure that you did not make any gifts or asset transfers below market value for the purpose of bringing your total assets below the state’s Medicaid threshold.

An important thing to keep in mind is that your state Medicaid agency will likely want to know about any changes in asset levels even if they occur after your application (and therefore after what is commonly considered the look-back period). Therefore, if you receive a windfall of money from an inheritance or house sale after applying for Medicaid, and then transfer or gift away this money in a way that would have violated the initial look-back period, you may be deemed ineligible for Medicaid benefits depending on your state’s rules. 

Common Medicaid look-back period violations

Along with rather obvious violations of the Medicaid look-back period rules, such as simply giving away money to a friend or loved one, there are some common Medicaid look-back period issues and violations to be aware of. 

Missing documentation

One common look-back period pitfall that seniors run into when applying for Medicaid is that they are unable to provide proper documentation showing how they transferred assets within the look-back period. For instance, if you were to sell a vehicle for fair-market value during the Medicaid look-back period, but not be able to show the proper documentation speaking to the vehicle’s sale price, you may be deemed in violation of the Medicaid look-back period. Therefore, it is incredibly important to maintain and organize all documentation relating to major transactions if you believe that you may be applying for Medicaid in the next few years.

Paying family members for care

One particular way in which lack of documentation can result in a look-back period violation is if a senior fails to document the amounts that they are paying a loved one to provide them care. So while paying a family member to provide care to a senior loved one can be both a great idea and a viable method of asset spend down (discussed in greater detail below), it is vital to do so under a signed document, generally called a caregiver or life care agreement. 

If you are paying loved ones to provide senior care, make sure it is being done pursuant to a proper life care or caregiver agreement.

Medicaid Asset Protection Trusts

Many people might think that funds put into a Medicaid Asset Protection Trust are exempt from Medicaid’s look-back period but this is not the case. So while funds put into a Medicaid Asset Protection Trust before the Medicaid look-back period starts to run will be exempt from Medicaid asset level calculations, creating a Medicaid Asset Protection Trust during the Medicaid look-back period will generally be considered a violation. 

Exceptions to Medicaid look-back periods

There are some forms of asset transfers that are exempt from the Medicaid look-back period. Perhaps the most common exception is the Community Spouse Resource Allowance (also known as a CSRA), which allows a spouse that is applying for Medicaid to transfer some amount of their assets (as determined by the relevant state Medicaid authority) to the non-applying spouse. A CSRA allows the the applying spouse to reduce their assets in order to come under their state’s Medicaid asset threshold, while at the same time allowing the non-applying spouse to retain assets and therefore not become impoverished by their spouse’s Medicaid application. 

Other common exceptions include transfers of a seniors home. This can be done in a couple of ways, including transferring the home to a sibling if they are a part owner of the house and have lived in the home for at least one year prior to the senior’s Medicaid application. In addition, a home can be transferred to an adult child who has lived in the home and acted as the senior applicant’s primary caregiver for at least 2 years before the senior moved to a nursing home or assisted living residence. This level of care must have been the type of care which would have helped the senior remain out of a senior living facility for the time preceding their move into a senior living facility. 

Medicaid spend down

Along with the above transfer which are exempted from Medicaid look-back period rules, there are also ways in which a senior can “spend down” their assets in order to bring their asset level under the Medicaid threshold without running afoul of their state’s Medicaid look-back period rules. These spend down strategies include things like life care or caregiver agreements, purchasing Medicaid-exempt annuities, paying off debts, making home modifications, and putting money into irrevocable funeral trusts.

To learn more about Medicaid spend down, as well as specific strategies for spending down assets in a way that is Medicaid-compliant, check out our full Medicaid spend down guide here.

To learn more about how Sunbound can help make senior living more affordable for you or your loved one, send us an email at or request more information on Sunbound. Sunbound is the best way to pay for senior living and is on a mission to make senior living affordable for everyone.

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