Understanding Medicaid’s Look-Back Rule: What Every Family Should Know

The Lansky Law Firm | Peace of Mind through Preparation

Many families don’t begin thinking about Medicaid until they’re in the middle of a crisis—often when a loved one suddenly needs nursing home or in-home care. By that time, options are limited, and mistakes can become costly.

One of the most commonly misunderstood aspects of Medicaid eligibility is the five-year look-back rule—a small detail that can have a big impact on your ability to qualify for benefits without exhausting your savings.

At The Lansky Law Firm, we help families understand how this rule works, how to avoid its pitfalls, and how to plan ahead with clarity and confidence.

What Is the Medicaid Look-Back Rule?

When someone applies for long-term care Medicaid—the program that helps cover the costs of skilled nursing or home health services—the government reviews their financial records from the five years prior to the application date. This is known as the look-back period.

During this period, Medicaid looks for any transfers of assets for less than fair market value. These can include:

• Gifting money to children or grandchildren—even for birthdays or weddings

• Adding someone to the deed of a home without receiving payment

• Selling property to a loved one at a discount

• Making large charitable donations close to the application date

• Helping someone with a down payment or co-signing a loan

If any of these transactions are flagged, Medicaid may impose a penalty period—a period of ineligibility during which care must be privately funded, potentially costing tens of thousands of dollars.

Why It’s Easy to Make Mistakes

Because Medicaid rules vary by state and are often highly nuanced, it’s not uncommon for well-intentioned families to make decisions that inadvertently trigger penalties.

Even actions that seem generous or routine—like helping a child buy a home or sharing an inheritance—can be seen as uncompensated transfers under Medicaid law.

Without proper planning, these moves can lead to delays in coverage or complete ineligibility at a time when care is urgently needed.

Why Early Planning Is Essential

The best time to plan for long-term care is before a health crisis occurs. Starting early allows you to take full advantage of legal tools that can preserve your eligibility for Medicaid and protect your assets.

At The Lansky Law Firm, we guide families through proven strategies such as:

• Medicaid Asset Protection Trusts (MAPTs)

• Formal Caregiver Agreements

• Customized Spend-Down Plans

Even if you’re already within the five-year window, there are often still ways to minimize penalties. But the sooner you begin, the more options you have available.

The Bottom Line

The Medicaid look-back rule is one of the biggest pitfalls facing aging adults and their families. It’s not about finding loopholes or hiding assets—it’s about understanding the system and using smart, legal planning to protect what you’ve worked so hard to build.

At The Lansky Law Firm, we offer the guidance and experience you need to move forward with confidence—because your peace of mind is our priority.

Ready to take the first step toward protecting your future? Let’s start the conversation today.  Visit Us: 6800 Poplar Ave #225, Memphis, TN 38138  Call Us: (901) 767-7006  Learn More: www.lanskylawfirm.com 

The Lansky Law Firm Peace of Mind through Preparation.