Many people believe if they start getting rid of assets immediately, they’ll be “impoverished” enough and qualify for Medicaid. For instance, someone who sells property, such as their house, for less than market value in order to qualify. Unfortunately, that’s not the way it works, and you could bring even more trouble if you do it without help.
New York’s Medicaid program has what’s called a “look-back period.” This means that any assets transferred out of the applicant's name (or spouse's name) in the years before applying for Medicaid can lead to a denial of eligibility for as long as five years.
For Institutional Medicaid (Chronic Medicaid/Nursing Home Medicaid), the current lookback period is 5 years.
For Community Medicaid, there is currently no lookback period but starting in January 2022, a 2½ year lookback period will eventually be implemented. This new law became effective on October 1, 2020, and will increase monthly up until the 2½ year limit.
Medicaid examines all transactions during the appropriate timeframe to ensure that assets were not sold or gifted for less than fair market value. If an asset was transferred during the look-back period, a period of Medicaid ineligibility is created. Medicaid will not pay for 1 month of care for approximately every $13k transferred.