About 1.4 million Americans live in nursing homes, but how do they pay for it?
The majoritynearly two-thirds of all nursing home residentsrely onMedicaidto foot the bill.
But getting approved for Medicaid can be tricky, especially when it comes to the Medicaid Look-Back Period.
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Here’s what you better know so that you could get nursing home care when you need it.
Unfortunately, few people can afford private long-term care insurance.
These types of plans are purchased to help pay for home health care and/or nursing home care.
The premiums can be expensive and it can be hard to get a policy if you havepre-existing conditions.
Medicare does not help much either.
Ultimately, 63% of long-term nursing home stays are covered by Medicaid.
That changed with the passage of theAffordable Care Act(aka Obamacare) in 2010.
The majority of people now qualify for Medicaid based on themodified adjusted gross income (MAGI).
MAGI looks at different sources of income but does not take your assets into consideration.
This is the approach used for children, pregnant women, and adults under the age of 65.
This means the program considers both their income and assets when determining eligibility.
This is true regardless of how low your income might be.
This helps to protect the solvency of Medicaid, which is funded by tax dollars.
That $38,000 would be identified by Medicaid as assets that you transferred within the Look-Back Period.
That is unless it was established within the past five years (30 months in California).
These do not count towards the Medicaid Look-Back Period.
The Spousal Impoverishment Standard changes every year.
Depending on the state, the spouse may retain assets ranging from $31,584 to $157,920.
Home equity limits fall between $730,000 to $1,097,000.
How the Look Back Period Works
The Look-Back Period reviews all financial transactions made by the applicant.
This can be a challenge for seniors who may need more urgent placement in a nursing facility.
The latter is referred to as the penalty divisor.
Example 1:The penalty divisor in your state is $6,000 per month.
You give away $60,000 during the Look-Back Period.
Example 2:The penalty divisor is $6,000.
You give $12,000 away to your niece each year over 10 years.
Example 3:The penalty divisor is $6,000.
You cannot always predict when you will need nursing home care.
That is why it is so important to understand the Medicaid Look Back Period.
It may be in your best interest to reach out to an elder care attorney for advice.
Market.us Media.Nursing home care statistics 2025 by facilities, long-term care, finance.
KFF.A look at nursing facility characteristics between 2015 and 2024.
CareScout.Calculate the cost of long term care near you.
Retirable.com.Average retirement income 2025: how do you compare?
American Council on Aging.Understand Medicaids look-back period; penalties, exceptions & state variances.
New York Department of Health.30-month lookback for community based long term care services.
U.S. Internal Revenue Service.Frequently asked questions on gift taxes.
Centers for Medicare & Medicaid Services.2025 SSI and spousal impoverishment standards.
