Look-back period

What it means

When somebody applies for Medicaid long-term care, the agency reviews transfers made during a period before the application set by federal law.

A transfer for less than fair value during that period generally causes a penalty: a period of ineligibility, calculated from the value transferred.

The penalty usually begins when the person is otherwise eligible and needing care — which is to say, at the worst possible moment.

Why it matters

Well-meant transfers are the classic mistake: signing a house over to a child to protect it, and thereby creating a period during which Medicaid will not pay for the care that is already needed.

It is also why advice given by a friend who did this successfully some years ago should be treated with suspicion — the rules and the arithmetic both moved.

When you are likely to meet it

• When considering transferring a house or savings.
• When applying for Medicaid.
• When a transfer made years ago comes to light during an application.

How this varies by state

How a state calculates the penalty period, and which transfers are exempt, are set by each state within federal rules.

Related terms

• Community spouse resource allowanceWhat the husband or wife still at home may keep when the other qualifies for Medicaid care.
• Fair market valueWhat a willing buyer would pay a willing seller, neither under pressure and both knowing the facts.
• Funeral trustMoney set aside to pay for a funeral, held so it cannot be spent and often so it does not count for Medicaid.
• Irrevocable trustA trust that generally cannot be changed or undone once created. Giving up control is the point of it.
• Life estateAn arrangement where one person has the right to use property for their lifetime, and somebody else automatically owns it afterwards.
• MedicaidA joint federal and state program that pays for health care, including long-term care, for people with limited income and assets.
• Medicaid estate recoveryA state's claim against the estate of somebody whose long-term care Medicaid paid for, to recover what it spent.
• Personal care agreementA written contract under which a family member is paid to provide care.
• Spend-downUsing up income or assets on care until they fall below the limit at which Medicaid will start paying.
• Undue influencePressure that overcomes somebody's own wishes, so that a will, gift or transfer reflects the influencer's intentions rather than theirs.

Sahvelo guidance that uses this

• Housing transitions