Start here →
Mini-hub · 5-Year Lookback

The 5-year lookback,
line by line.

Every transfer in the 60 months before your Medicaid application is on the table. Here's what the rule actually says, how the penalty gets calculated, and which moves survive it.

By The ElderCareAtlas Editors··Last reviewed

Remembrance and reflection — morning mist lifting through warm grasses at early light

What is the Medicaid 5-year lookback?

The 5-year lookback is a federal Medicaid rule that reviews every asset transfer the applicant made in the 60 months before applying. Uncompensated transfers — gifts, below-market sales, forgiven loans — create a penalty period of ineligibility computed by dividing the transfer amount by the state's monthly penalty divisor.

How the math actually works

Every state publishes a monthly penalty divisor — roughly the state's private-pay nursing-home cost1. Divide the uncompensated transfer amount by the divisor to get the months of ineligibility. The clock starts on the date the applicant would otherwise have been eligible, not on the date of the transfer2.

That timing detail matters enormously. A gift made three years before applying still produces a penalty period — but the penalty only begins once the applicant is broke and admitted to a facility. This is why "giving it all to the kids and hoping for the best" is the most consistently bad Medicaid planning strategy in American elder law.

The five safe harbors

  1. Transfers to a spouse. Inter-spousal transfers of any amount, any time. The spouse is a single household for Medicaid asset purposes.
  2. Transfers to a disabled child. Any age. Any amount. The child must be "disabled" as defined by the Social Security Administration.
  3. The caregiver-child exception on the home. Transfer of the primary residence to an adult child who lived in the home and provided care that demonstrably delayed institutionalization for at least 2 years before the application.
  4. The sibling exception on the home. Transfer of the primary residence to a sibling who had an equity interest in the home and lived there for at least 1 year before the applicant entered a facility.
  5. Qualified disability trust. Transfer to a trust for the sole benefit of a disabled person under age 65 meeting specific federal criteria.

What the lookback sees

Every bank-account transaction, every deed transfer, every tax return, every gift-tax filing. Medicaid caseworkers pull 60 months of financial records and flag anything that looks like an uncompensated transfer. Birthday-card checks to grandchildren, forgiven intra-family loans, below-fair-market house sales to adult children — all visible, all scrutinized.

The fix is not to hide transfers (which is fraud). The fix is to structure transfers through one of the five safe harbors, or to time them outside the 60-month window.

Penalty divisors by state

The divisor ranges from ~$5,700/month in Texas to ~$15,600/month in Alaska, and gets updated annually in most states (quarterly in some). See every state's current divisor.

Practical consequence: a $100,000 gift in Texas creates ~17 months of ineligibility, but the same gift in Alaska creates only ~6 months. Planners in high-divisor states have more room to absorb existing gifts via the penalty clock; planners in low-divisor states need to keep the lookback spotless.

A federal Medicaid rule requiring review of every asset transfer the applicant made in the 60 months preceding the long-term-care Medicaid application. Transfers for less than fair market value during that window create a penalty period computed by dividing the transfer amount by the state's monthly penalty divisor.
Cash gifts to anyone other than a spouse, real-estate transfers below market value, adding a non-spouse to a deed, funding a revocable trust (countable as still the applicant's), forgiving a loan, selling a car to a relative for $1, paying a family caregiver without a formal written agreement. The rule is about "uncompensated transfers," not the intent behind them.
Transfers to a spouse, to a disabled child, to a caregiver child who lived with and cared for the applicant 2+ years, to a sibling who had an equity interest in the home and lived there 1+ year, and transfers to a qualified disability trust for a disabled person under 65. These are the five federal safe harbors.
Divide the uncompensated transfer amount by the state's 2026 monthly penalty divisor. A $60,000 gift in a state with a $10,000 divisor = 6 months of Medicaid ineligibility, starting on the date the applicant would otherwise have qualified. Fractional months typically round down in most states.
No. Assets in a revocable (living) trust remain the applicant's countable assets because the applicant retains control. Only irrevocable Medicaid Asset Protection Trusts (MAPT) outside the 5-year window shelter assets — and only when the applicant has surrendered control in ways the state will respect.

Sources

  1. Cost of Care Survey — Genworth Financial · state private-pay nursing-home cost, 2026
  2. 42 U.S.C. § 1396p — Liens, Adjustments, and Transfers of Assets — Cornell Law School — Legal Information Institute · § 1396p(c) — 60-month lookback and penalty computation
Next step

Check your state's penalty divisor.

The divisor determines how bad (or how manageable) an existing gift will be once you apply. Every state page shows the current 2026 figure alongside the CSRA and home-equity numbers.

Find my state →Talk to a CMP or attorney