Few things worry older veterans and their spouses more than the cost of a nursing home. Two public programs often come up: Medicaid and VA pension with Aid and Attendance. Both look at what you own, and both look back in time at gifts and transfers. Under federal Medicaid law, the "look-back period" is 60 months (five years) before the date a person applies, according to CMS. VA pension has its own, shorter look-back of 36 months. This guide explains both sets of rules in plain English, using official sources, so your family knows what questions to ask.
Key Takeaways
- Medicaid's federal look-back period for long-term care is 60 months. Transfers for less than fair market value in that window can lead to a penalty period with no Medicaid long-term care coverage.
- Medicaid is a joint federal and state program. Each state runs its own program, so the details vary by state.
- Federal spousal impoverishment rules protect some assets and income for the spouse still living at home. For 2026, the protected resource amount ranges from $32,532 to $162,660, depending on the state.
- VA pension has a net worth limit of $163,699 for December 1, 2025, through November 30, 2026. Net worth counts both assets and yearly income.
- VA's look-back is 36 months, and a VA penalty period cannot exceed 5 years.
- State Medicaid programs must recover the cost of certain benefits, including nursing facility services, from an enrollee's estate.
Table of Contents
- Who Pays for Nursing Home Care
- The Medicaid Five-Year Look-Back
- Protections for the Spouse at Home
- VA Pension Net Worth Limit and Look-Back
- Steps Families Take Before a Crisis
- Ask the Navigator
- Frequently Asked Questions
- Sources
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Who Pays for Nursing Home Care
There is no single payer for long-term nursing home care. Families usually draw on a mix of sources.
VA long-term care
VA says, "You may be able to get VA benefits to help pay for nursing home care. It depends on your income and the level of your service-connected disability." VA nursing home care can come with a copay. Starting January 1, 2026, VA lists a copay of up to $97 a day for inpatient extended care, such as a Community Living Center. VA says long-term care copays "are not charged until the 22nd day of care." For more detail, see our guide to VA nursing home and long-term care benefits.
Medicaid
Medicaid.gov explains that Medicaid "is a joint federal and state program." Federal law sets the floor, and each state builds its own program on top of it.
VA pension with Aid and Attendance
VA pension has a net worth limit, covered below. Veterans who receive VA pension and need help with daily activities, or who are in a nursing home because of a disability, may qualify for the higher Aid and Attendance rate. For December 1, 2025, through November 30, 2026, VA lists the maximum yearly pension for a veteran with no dependents who qualifies for Aid and Attendance as $29,093. Learn more in our article on Aid and Attendance.
The Medicaid Five-Year Look-Back
The look-back is the rule most families have heard about but few fully understand.
What the rule says
The Deficit Reduction Act of 2005 changed the federal rules. CMS explains, "The DRA lengthened the 'look-back period' to 60 months (five years) prior to the date the individual applied for Medicaid." Medicaid.gov adds that "Medicaid beneficiaries who need LTSS will be denied LTSS coverage if they have transferred assets for less than fair market value." LTSS means long-term services and supports, such as nursing home care.
When a penalty starts
A transfer for less than fair market value, such as a large gift to a child, can trigger a penalty period. For transfers made on or after February 8, 2006, CMS says the penalty period "now begins on either the date of the asset transfer, or the date the individual enters a nursing home ... whichever is later." In real life, that can mean the penalty starts just when care is needed most.
Other federal rules
- Home equity limit: Federal law limits how much home equity a person can have and still get Medicaid long-term care. For 2026, CMS lists a minimum of $752,000 and a maximum of $1,130,000. States may set their limit within that range.
- Annuities: Applicants must "disclose any interest in an annuity," and certain annuities must name the State as a remainder beneficiary, according to CMS.
- Hardship waivers: The DRA lets states make an exception when a penalty "would threaten the health or life of an individual" or deprive the person of food, clothing, shelter, or other necessities.
Estate recovery
Medicaid.gov states that "State Medicaid programs must recover from a Medicaid enrollee's estate the cost of certain benefits paid on behalf of the enrollee, including nursing facility services." What counts as the "estate," and which property is reached, depends on state law. An elder law attorney in your state can explain how your state handles it.
Protections for the Spouse at Home
Congress did not want one spouse's nursing home bill to leave the other spouse with nothing. Medicaid.gov says the spousal impoverishment rules aim to stop "leaving the spouse who is still living at home in the community with little or no income or resources."
2026 federal spousal impoverishment standards
CMS published these 2026 standards, effective January 1, 2026:
- Community spouse resource standard: minimum $32,532; maximum $162,660.
- Minimum monthly maintenance needs allowance: $2,643.75 in all states except Alaska and Hawaii.
- Maximum monthly maintenance needs allowance: $4,066.50.
Why your state matters
These are federal ranges. States choose where to set their own amounts within them. They also set many other rules, such as how certain trusts and property are treated. Never assume a rule you read about one state applies in yours. Your state Medicaid agency or a local elder law attorney can confirm the current figures.
VA Pension Net Worth Limit and Look-Back
VA pension has its own asset test and its own look-back. It is separate from Medicaid, and the numbers are different.
The net worth limit
For December 1, 2025, through November 30, 2026, the VA pension net worth limit is $163,699. Under 38 CFR 3.274, "Net worth means the sum of a claimant's or beneficiary's assets and annual income." VA says net worth includes the assets and income of you and your dependents.
What VA does not count
- Your home: Under 38 CFR 3.275, VA excludes your primary residence, including a lot of up to 2 acres (87,120 square feet), "unless the additional acreage is not marketable." VA does not subtract a mortgage on your primary residence.
- Your car: VA's pension rates page says your car is excluded.
- Personal effects: These are excluded under 38 CFR 3.275.
- Medical costs: Under 38 CFR 3.274, unreimbursed medical expenses can be deducted from annual income, to the extent they exceed 5% of the applicable maximum annual pension rate.
The 36-month look-back and penalty
Under 38 CFR 3.276, VA looks back 36 months before the pension claim date. If a person gave away or sold assets for less than fair market value, and those assets would have pushed net worth over the limit, VA can impose a penalty period. The penalty cannot exceed 5 years. VA figures it by dividing the transferred amount by a monthly penalty rate, based on the Aid and Attendance rate for a veteran with one dependent. For the 2026 rate year, that yearly rate is $34,488.
One key exception
38 CFR 3.276 does not penalize certain transfers to a trust for a child VA has rated incapable of self-support, as long as the trust does not allow distributions that benefit the veteran, the spouse, or the surviving spouse.
Steps Families Take Before a Crisis
Here is an educational checklist. It is not legal or financial advice. Rules vary by state, and an elder law attorney can confirm what applies to you.
- List all assets and income. Include bank accounts, investments, real estate, and annuities for both spouses.
- Gather five years of statements. Medicaid's look-back is 60 months. VA's is 36 months.
- Write down any past gifts or transfers. Note dates and amounts. These are what the look-back rules examine.
- Check VA eligibility first. Enroll in VA health care and ask a VA social worker about nursing home options and copays.
- Compare to the 2026 figures. Look at the $163,699 VA net worth limit and your state's Medicaid spousal standards.
- Talk to a VA-accredited representative and an elder law attorney. Ask how your state treats trusts, the home, and estate recovery.
- Update your legal papers. Many families review powers of attorney, health care directives, and trusts at the same time.
Ask the Navigator
Have a question about VA pension, Aid and Attendance, or how nursing home costs could affect your legacy? Ask AVOY Veteran Navigator AI™ at avoyvet.com. Then take the free Veteran Legacy Checklist to organize your documents and see where your plan has gaps.
Frequently Asked Questions
How long is the Medicaid look-back period?
Under federal law, it is 60 months (five years) before the date of the Medicaid application, according to CMS.
Is the VA pension look-back the same as Medicaid's?
No. VA's look-back is 36 months before the pension claim date, under 38 CFR 3.276. Medicaid's is 60 months.
Does VA count my house toward the net worth limit?
Generally, no. VA excludes your primary residence and a lot of up to 2 acres, unless extra acreage is not marketable. If you sell the home after pension starts, the proceeds can count unless used to buy another home in the same calendar year.
Are Medicaid nursing home rules the same in every state?
No. Federal law sets the basic rules, such as the 60-month look-back. But each state runs its own Medicaid program and sets many of its own figures within federal ranges.
Can Medicaid take money from my estate after I die?
Medicaid.gov says state Medicaid programs must recover the cost of certain benefits, including nursing facility services, from an enrollee's estate. How this works depends on your state's law.
Sources
- Deficit Reduction Act: Important Facts for State Policymakers (Transfer of Assets) — CMS.gov
- Eligibility Policy — Medicaid.gov
- Spousal Impoverishment — Medicaid.gov
- 2026 SSI and Spousal Impoverishment Standards — Medicaid.gov
- Current pension rates for Veterans — VA.gov
- 38 CFR 3.274 — Net worth and VA pension — eCFR
- 38 CFR 3.275 — Criteria for evaluating net worth — eCFR
- 38 CFR 3.276 — Asset transfers and penalty periods — eCFR
- Nursing homes, assisted living, and home health care — VA.gov
- Current VA health care copay rates — VA.gov
- VA Long Term Care Services — VA.gov
Educational information only — not legal, tax, financial, or medical advice, and not affiliated with the U.S. Department of Veterans Affairs. Estate and probate rules vary by state; an estate attorney in your state can confirm what applies. For VA benefits help, contact a VA-accredited VSO (often free), claims agent, or attorney.
