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Being eligible for Medicaid can make or break retirement plans. Now that its time to par down assets, here is a quick glance at how gifts can affect eligibility.

What Does Eligibility Mean

Medicaid only allows recipients to maintain a certain amount of liquid assets and a gift over that amount will make the recipients ineligible.

Example 1- Eligible persons may not give away assets to become eligible for Medicaid. Medicaid laws impose an ineligibility period for gift made inside the “look back” period.

The look back period is the time frame in which the government looks back to see if either the recipient or their spouse made any gifts. Gifts given after 2/8/2006 are subject to a look back period of 5 years due to the Deficit Reduction Act of 2005.

The penalties imposed on gifts given inside the look back period are calculated based on the division of the value of the gift given(less value received) by the average monthly cost of care. While Medicaid generally looks for gifts over $1000, there is no minimum amount.

Example 2- Should a Medicaid recipient receive a gift, they must pay down that money before they are eligible to continue receiving benefits. In most cases, recipients may have no more than $2000 liquid assets. This does not include their home, furnishings or jewelry such as wedding rings. They are also allowed funeral and burial provisions.


Most of the confusion is because the federal government writes the law, but the states are left to administer the programs on their own. Gifts that affect Medicaid laws vary widely from state to state.

While consulting a professional before giving or receiving gifts is the best piece of advice to give; Medicaid laws change all the time. Even professionals cannot guarantee the end results.