Before your parent applies for Medicaid, understand the 60-month look-back

Your mother needs more care than the family can give, her savings are running down, and someone at the kitchen table says the house should go into the kids’ names before Medicaid can count it.

Stop there. That single move, made at the wrong time, is the most expensive mistake in the long-term care system.

What is the Medicaid look-back period?

When your parent applies for Medicaid to cover long-term care, the state reviews the previous 60 months of their financial records.¹ This is the look-back period. It applies to Medicaid for long-term care, such as nursing facility care, not to every Medicaid program. The federal Deficit Reduction Act of 2005 extended it from 36 months to 60 months.³ California is the exception: it reviews 30 months.⁵

The state is looking for two things: gifts, including transferring a house or money to children, and sales of property for less than it was worth. Either one inside the window is treated as an attempt to spend down assets artificially, and either one triggers a penalty.

How does the Medicaid penalty period work?

Medicaid does not simply deny the application. It takes the total value given away during the look-back and divides it by the average monthly cost of nursing home care in your state. The result is the number of months your parent is ineligible for Medicaid long-term care coverage.

That penalty lands at the moment your parent is otherwise eligible and applying, which is usually when they need care most and the money is gone. A family that signed the house over to protect it ends up with a parent who needs a nursing home, has no way to pay for it, and cannot get Medicaid for months or years.

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What is your parent allowed to keep?

The look-back scares families into giving away things Medicaid would never have counted. In 2026 the rules generally work like this:

• The home is generally not counted while your parent is alive if a spouse or dependent lives there, or your parent intends to return. For long-term-care coverage a separate home-equity limit applies, which each state sets within the 2026 federal range of $752,000 to $1,130,000.⁴ That equity limit does not apply while a spouse or a qualifying child lives in the home.
• A spouse still living at home may keep countable assets up to a 2026 federal maximum of $162,660.⁴ That is a ceiling, not an amount every spouse keeps: the protected amount depends on the state’s method and the couple’s assessed assets, and the treatment of the at-home spouse’s own income is set by state rules.
• One vehicle, personal belongings, and properly arranged prepaid funeral or burial plans are often exempt.

“Not counted while alive” is not the same as safe forever. After a Medicaid recipient age 55 or older dies, states are required to seek repayment of long-term care costs from the estate, and the home is often the main target, according to Medicaid.gov.² Recovery generally cannot proceed while a surviving spouse is living, or while a surviving child is under 21, blind or disabled.² Some states also protect an adult child who lived in the home and provided care, but that protection is not automatic nationwide and comes through different rules: an exempt transfer of the home, a limit on liens, or a hardship waiver, each with state-specific conditions and time requirements.

Those protections are the legal way to keep a house in the family. A rushed transfer inside the look-back is the way to lose both the house and the coverage.

What should you do next?

1. If your parents are healthy today, start now. Planning done years ahead is inexpensive and effective. Planning done the month care becomes unaffordable has almost no good options left.
2. Before any transfer of money or property, consult an elder-law attorney or certified Medicaid planner. One consultation costs far less than a penalty period.
3. Keep five years of clean financial records: bank statements, deeds, and a note on the purpose of any large check or transfer. You will be asked for them.
4. Call your state Medicaid office or your State Health Insurance Assistance Program (SHIP) for free guidance on your state’s exempt assets and spousal allowance.
5. If protecting the home for a spouse or a disabled child matters to you, ask about estate-recovery exemptions at the start of the process, not after.
6. Send this to your siblings before anyone moves money.