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There is a five-year look back period for purposes of Medicaid benefits. What that means is that, if a person seeks benefits, Medicaid will look at all assets transferred during the past five years to determine the person's eligibility. If a person gave away an asset during that time, they're essentially treated as if they still had it. What that means is that Medicaid will look at the value of the home, and the average cost of nursing home care in your state, then deny coverage for a number of months based on the result.
For example, assume that the house is worth $50,000. If they sell the house and give you the $50,000, and average nursing care in your area is $5,000, Medicaid can decline to pay for the care for 10 months. This time is known as the penalty period.
There are some exemptions
that can protect the house itself while they are living in it. But if the house is sold, the money the get from the sale wouldn't be protected.
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