If your parent or spouse is moving into a nursing home in California, Medi-Cal will look at assets given away in the 30 months before entry into the facility. Only gifts and below-value sales made on or after January 1, 2026 count. A transfer inside that window can delay long-term care coverage for a period of months.
Most people facing this question are sitting with a specific memory. It might be the check a mother wrote to help with a grandchild's tuition, or the car a father signed over last spring. It might be a sister added to a bank account. Now a nursing home is close, or already here, and the family wants to know whether that kindness will cost them. This page explains how California's look-back works, how a penalty is figured, which transfers carry no penalty, and how all of this differs from what happens to the home after a death.
What the Medi-Cal Look-Back Period Is
A look-back period is the stretch of time before someone needs long-term care during which Medi-Cal reviews whether assets were given away or sold for less than they were worth. The California Department of Health Care Services (DHCS) states the rule plainly on its Asset Limit Frequently Asked Questions page. If someone moves into a nursing home, Medi-Cal will look at any assets given away in the 30 months before entry into the facility. Transfers made before January 1, 2026 will not be counted. Transfers made on or after that date may cause a penalty that delays coverage.
California's window is California's own. The federal framework in 42 U.S.C. § 1396p sets a look-back of 60 months for any transfer made on or after February 8, 2006 (42 U.S.C. § 1396p(c)(1)(B)(i)). Each state runs its own program within that framework, so a figure from another state, or the federal number, does not describe Medi-Cal.
The look-back concerns long-term care. DHCS says that for most people, giving away or selling assets won't affect Medi-Cal. The concern is for people who live in a nursing home or may need long-term care.
A countable asset is something Medi-Cal adds up when deciding eligibility, such as savings or a second home. Some things are not counted at all. That counting rule changed in 2026, as a later section explains, and it is a separate question from the look-back.
How DHCS Reviews Transfers During the Look-Back
A transfer for less than fair market value means giving something away, or selling it for less than it is worth. A gift of cash, a house deeded to a child for a dollar, or a car sold to a neighbor at a fraction of its value would each fit that description. Federal law states the rule this way:
"if an institutionalized individual or the spouse of such an individual ... disposes of assets for less than fair market value on or after the look-back date ... the individual is ineligible for medical assistance for services described in subparagraph (C)(i) ... during the period beginning on the date specified in subparagraph (D) and equal to the number of months specified in subparagraph (E)." (42 U.S.C. § 1396p(c)(1)(A))
The services covered include nursing facility care, an equivalent institutional level of care, and certain home and community-based waiver services.
The review happens when the application is made, not when the gift happens. Federally, the look-back is measured back from the first date a person is both institutionalized and has applied for coverage. California measures its 30 months from entry into the facility.
A transfer inside the window does not end eligibility for good. It triggers a penalty period instead. A penalty period is the number of months Medi-Cal will not pay for the long-term care services described above. Under 42 U.S.C. § 1396p(c)(1)(E), federal law sets the number of months by dividing the total uncompensated value of all transfers in the window by the average monthly private-pay cost of nursing facility care in the state at the time of application. A state may not round down a partial month.
The timing of the penalty matters most. Under 42 U.S.C. § 1396p(c)(1)(D)(ii), for transfers on or after February 8, 2006, the penalty begins on the later of two dates. The first is the month of the transfer. The second is the date the person is otherwise eligible and would be receiving institutional-level care but for the penalty. In practice, the penalty clock usually starts when the person is in care and would otherwise be eligible. A gift made early in the window is penalized the same way as one made last month.
Federal law also treats certain purchases as transfers unless they meet strict conditions. These include some annuities, promissory notes and loans, and a life estate in someone else's home where the buyer does not live there for at least one year after buying it.
Transfers That Do Not Trigger a Penalty
Federal law lists transfers that carry no penalty. A gift inside the window is not always penalized.
A transfer to the person's own spouse carries no transfer penalty (42 U.S.C. § 1396p(c)(2)(B)(i)). The rule is not capped at an allowance amount. A separate provision protects a transfer of the home itself when title goes to the spouse (42 U.S.C. § 1396p(c)(2)(A)(i)).
The statute's list of exceptions continues beyond these. It includes further situations involving the home and certain family members, and transfers for the benefit of particular relatives. Each depends on precise facts, such as who lived in the home, for how long, and what care they gave. How California applies them in practice depends on California's current rules. The DHCS asset limit page points people to their county Medi-Cal office for help with safe ways to transfer assets.
Federal law also provides for undue hardship: an individual is not ineligible by reason of a transfer to the extent the State determines, under procedures it establishes, that denying eligibility would work an undue hardship (42 U.S.C. § 1396p(c)(2)(D)). The Centers for Medicare & Medicaid Services listed undue hardship among the transfer-of-assets topics in its State Medicaid Director Letter on the Deficit Reduction Act of 2005. A hardship exception is a request a state considers on the facts. It is available to ask for, but it is not automatic.
California's Asset Limit Changes and What They Mean for the Look-Back
Two things happened in California on January 1, 2026, and they are easy to blur together. According to DHCS, California passed a law that requires Medi-Cal to count assets for some Medi-Cal programs. Separately, the transfer rule for long-term care took effect the same day.
The first change is about what a person owns now. DHCS states that the most a person can own is $130,000 for one person through June 30, 2027, plus $65,000 for every extra person in the household, up to 10 people. Starting July 1, 2027, the DHCS limit is $21,000 for one person and $31,000 for two people, plus $1,550 for every extra person, up to 10 people. Under the DHCS chart, the main home and main vehicle are not counted. Second homes and second vehicles are counted. DHCS also notes that some married couples may qualify for higher limits under spousal impoverishment rules. Those details are covered more fully in California Medi-Cal asset limits.
The second change is about what a person gave away. The asset limit and the look-back answer different questions. A person can be under the asset limit today and still face a penalty for a gift made in the 30-month window. DHCS also explains that someone who may need long-term care spends down countable assets on things they need, such as medical bills or paying off a car loan or other debts. That differs from giving assets away.
"Share of cost" is a separate idea again. It concerns monthly income, not savings, and it is not the same as spending assets down to the limit. What happens next with any of these rules depends on California's current DHCS guidance.