How does giving a gift affect Medicaid eligibility?
A person is not allowed to give a gift in order to become eligible for Medicaid. In order to prevent this, the federal government has what it calls a "look back" period of five years. All gifts that were made within this look back period impose a penalty towards the person's Medicaid eligibility, calculated as the gift's value as a percentage of the monthly cost of care. In most cases, only gifts with a value greater than $1000 need to be reported, but technically all gifts count. Long-term care will be ended sooner than before, rather than having a financial penalty applied. Gifting to family members does not count towards this penalty.
How does receiving a gift affect Medicaid eligibility?
In the case that someone receives a financial gift, the value of that gift will have to be paid down before they are eligible to continue receiving benefits. This is the entire value of that gift. If the gift is below the reporting threshold, $1000, then it does not count. However, a person receiving Medicaid cannot have more than $2000 in liquid assets.