Paying for care

Medicaid's 5-year look-back for nursing home care, explained

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By Nursing Home Checker · Updated Oct 7, 2026 · How guides are checked

When you apply for Medicaid to pay for a nursing home, the state reviews the gifts and transfers you and your spouse made during the 60 months before. A transfer for less than fair market value in that window leads to a penalty period, a stretch of time when Medicaid will not pay for nursing home care, unless one of the exceptions in federal law applies. This guide explains how the rule works. It does not cover planning strategies.

How is the 60 months counted?

Federal law sets the look-back at 60 months for transfers made on or after February 8, 2006. It is counted back from the first date on which you are both living in a nursing home and have applied for Medicaid. Entering a nursing home does not start the clock by itself, and neither does applying by itself.

The rule applies to nursing home care, to the same level of care in another institution, and to home and community-based services under a Medicaid waiver.

What counts as a transfer?

• Gifts and sales below value. Anything given away or sold for less than fair market value. The amount that counts is the difference between what the asset was worth and what you received for it.
• Your spouse's transfers. Transfers by your spouse count the same as your own.
• Income as well as property. The law defines assets as all income and resources of you and your spouse, so giving away income can be a transfer.
• Payments for past care. CMS guidance treats a payment to a relative for care that was provided for free in the past as a transfer, unless there is evidence to show otherwise.
• Jointly owned assets. Any action that reduces or ends your ownership or control counts.
• Some trusts and financial products. Money placed in a trust that can no longer pay you is treated as transferred. Federal law also has specific rules for annuities, loans and promissory notes, and for buying a life estate in someone else's home.

How is the penalty period calculated?

The state adds up the uncompensated value of the transfers made on or after the look-back date and divides it by the average monthly cost of private-pay nursing home care in the state at the time you apply. The answer is the number of months Medicaid will not pay for nursing home care.

• There is no maximum. The length depends only on the amount transferred and the cost of care.
• Partial months count. Federal law does not let a state round down or disregard a fraction of a month.
• The divisor differs by state. Each state publishes its own figure, and some use regional or facility rates.

An example. Ohio's published figure is $8,669 a month, effective September 1, 2026. A $50,000 transfer divided by $8,669 comes to 5.77 months: 5 full months plus part of a sixth.

Figures come from each state's Medicaid or eligibility agency. Some states update them every year, others every two years or less often. Your state Medicaid agency can give you the current figure.

When does the penalty start?

For transfers made on or after February 8, 2006, the penalty starts on the later of two dates: the first day of the month of the transfer (or, in states that choose it, the following month), or the date you are eligible for Medicaid and would be receiving nursing home level care on an approved application if not for the penalty. A new penalty cannot start while an earlier one is still running. In practice that means a penalty for an old gift can begin only once you are in a nursing home, have applied and otherwise qualify. Once it starts, CMS says it runs without interruption.

Which transfers are not penalized?

Federal law lists the exceptions. They include:

• The home, when title goes to your spouse, to a child who is under 21 or is blind or disabled, to a sibling who has an equity interest in the home and lived there for at least one year before you entered a nursing home, or to a child who lived there for at least two years before you entered and provided care that let you stay at home.
• Any asset, when it goes to your spouse or to someone else for the sole benefit of your spouse, to a blind or disabled child or a trust solely for that child, or to a trust solely for the benefit of a disabled person under 65.
• Transfers with another purpose. When you can show that you intended to sell at fair market value, or that the transfer was made exclusively for a purpose other than qualifying for Medicaid. CMS guidance says verbal assurances are not enough.
• Assets that have been returned. CMS guidance says a partial return shortens the penalty but does not remove it.

Does the $19,000 gift-tax exclusion apply?

No. The $19,000 figure is the federal gift-tax annual exclusion for 2026, a tax rule. The Medicaid transfer rules in federal law contain no exception based on it. CMS has told states that they are "required to impose penalty periods even in the case of smaller asset transfers." State handbooks differ on very small transfers, so your state Medicaid agency is the place to ask.

What is the hardship waiver?

Every state must have a process for waiving the penalty when applying it would cause undue hardship. Federal law defines that as depriving the person of medical care so that health or life would be endangered, or of food, clothing, shelter or other necessities of life. The state must tell you the exception exists, decide in a timely way and give you a way to appeal. With your consent, the nursing home may file the hardship request for you.

What does a penalty do, and what can you do about it?

A penalty stops Medicaid payment for nursing home care and similar long-term care services. CMS says the person remains eligible for Medicaid and can have payment made for other services. The state must send a written notice that gives its reasons and explains the hardship exception and your right to a fair hearing. Federal rules give you a reasonable time to ask for a hearing, not more than 90 days from the date the notice is mailed.

For the income and asset limits that apply alongside this rule, see how Medicaid pays for a nursing home.