Medicaid, Nursing Home and Long-Term Care Planning in Pennsylvania

If a parent has just been told they need nursing-home or in-home care, you are probably the one making the calls. Pennsylvania’s Medical Assistance program (Medicaid) can pay for long-term care. It looks back five years at your parent’s money, it protects a spouse at home, and after death it can make a claim against the estate. This page explains all three, in the order you will meet them. Timing matters more than anything else here: the options five years before care are very different from the options in the week of admission.

What Medicaid long-term care pays for in Pennsylvania

It covers nursing facility care and home and community-based services (HCBS), which let a person receive care at home. Applications go through the county assistance office (CAO). Eligibility has two parts, the level of care your parent needs and the money test. This page is about the money.

The money test: income and resources

Pennsylvania counts your parent’s income and “resources” (bank accounts, investments and most other assets). These are the limits for one person applying for long-term care (55 Pa. Code § 178.1; DHS figures for 2026):

Some things are not counted at all (55 Pa. Code §§ 178.62, 178.62a):

• The home, if its value is at or below $752,000 (2026) and your parent lives there or intends to return, or a spouse or dependent lives there.
• One motor vehicle.
• Burial spaces, and revocable and irrevocable burial reserves within limits.

The Department of Human Services (DHS) updates these figures each January.

The five-year look-back, and what the county will actually ask for

When your parent applies, the county reviews every asset transferred, sold or given away in the 60 months before the application date (55 Pa. Code § 178.104a(a); 42 U.S.C. § 1396p(c)(1)(B)(i)). For someone already on Medical Assistance who applies for home and community-based services, DHS runs the five years back from the assessment date instead (DHS Long-Term Care Handbook § 440.82).

In practice, the CAO generally asks for (DHS Long-Term Care Handbook § 440.811):

• Monthly statements for every account for the most recent two years.
• Two months of statements for each of the three years before that.
• Five years of tax returns, if your parent filed them.

How a penalty is calculated

Assets given away for less than they were worth during the look-back lead to a penalty period. The total uncompensated value of the transfers is divided by the average daily private pay rate in effect when the application is processed (55 Pa. Code § 178.104a(d)). From January 1, 2026, that rate is $421.20 a day.

Illustration only: a $50,000 gift divided by $421.20 comes to roughly 118 days during which Medicaid will not pay for care. The penalty begins on the date your parent would otherwise be eligible for Medicaid based on an approved application, not on the date of the gift (55 Pa. Code § 178.104a(b)).

Home transfers that do not trigger a penalty

Pennsylvania allows the home to be transferred without penalty to certain people (55 Pa. Code § 178.104(e)(1)):

• A spouse.
• A child under 21, or a blind or disabled child of any age.
• A brother or sister who already has an equity interest in the home and lived there for at least one year immediately before your parent entered care.
• A caregiver child: a son or daughter who lived in the home for at least two years immediately before your parent entered a facility, and whose care allowed your parent to stay at home instead of in a facility. DHS also requires a doctor’s written statement confirming that care, and companionship alone does not qualify (DHS Long-Term Care Handbook § 440.8).

Paying a family member for care

Pennsylvania presumes that paying a relative for care that was previously given for free is a transfer for less than fair market value. That presumption can be rebutted. The strongest evidence is a written agreement made at the time the care is given, stating the type, frequency and duration of the services and the amount paid. Paying more than the care is worth is still treated as a transfer for less than its value (DHS Long-Term Care Handbook § 440.811; 55 Pa. Code § 178.104(e)(3)).

If your parent is married: what the spouse at home keeps

Medicaid protects part of a married couple’s assets and income for the spouse who stays at home. Under the spousal protection rules (55 Pa. Code §§ 178.122 to 178.124; 42 U.S.C. § 1396r-5):

• The spouse at home keeps a spousal share of one-half of the couple’s total countable resources, but not less than $32,532 and not more than $162,660 (2026).
• The spouse at home keeps all of their own earnings and is not required to pay for the other spouse’s care.
• They may also qualify for a monthly maintenance needs allowance from the other spouse’s income, with a hearing available in exceptional circumstances.
• A Resource Assessment (form PA 1572) can be requested when the spouse enters care.

These are numbers, and the numbers shape the plan. Working through them with a couple is often the first useful step.

Where trusts fit

An irrevocable trust set up well before care is needed may, depending on its terms, move assets outside the Medicaid count, but it is subject to the same five-year clock (55 Pa. Code § 178.7). We explain how these work on our page on Medicaid asset protection trusts and other irrevocable trusts, and more broadly in asset protection planning in Pennsylvania.

The document that stops families: the power of attorney

If your parent can no longer manage their affairs, you will be acting under their power of attorney. The law lets an agent make gifts, create or change a trust, change joint ownership or change beneficiary designations only if the power of attorney expressly grants that authority (20 Pa.C.S. § 5601.4(a)). Unless the document says otherwise, a gift power is generally limited to the federal annual gift-tax exclusion per person (20 Pa.C.S. § 5601.4(d)).

Many older powers of attorney do not include that language, and a parent who has lost capacity cannot sign a new one. If your parent can still sign, review it now. See our overview of a durable power of attorney and the other core estate planning documents.

After a parent dies: Pennsylvania estate recovery

Pennsylvania seeks repayment of Medical Assistance paid for nursing facility care, home and community-based services, and related hospital and prescription costs received at age 55 or older (62 P.S. § 1412(a); 55 Pa. Code § 258.1). The claim is made against the probate estate, meaning the property the executor administers. Our page on what passes through probate in Pennsylvania explains that distinction.

Recovery does not reach (55 Pa. Code § 258.3):

• Property held jointly with right of survivorship, or by a married couple as tenants by the entireties.
• Life insurance paid directly to a named beneficiary.
• Assets placed in a trust before death that are not payable to the estate, including irrevocable burial reserves.

It does reach everything the executor administers, life insurance payable to the estate, and assets left to a trust created by the will.

When recovery is postponed or waived

Collection is postponed while there is a surviving spouse, a surviving child under 21, or a blind or permanently disabled child, and while a brother or sister with an equity interest who lived in the home for at least a year before the death still owns and lives in it. No interest runs during the postponement (55 Pa. Code § 258.7).

DHS may also grant undue hardship waivers (55 Pa. Code § 258.10), including:

• A waiver on the home for a family member who lived there continuously for at least two years before your parent entered care, gave care during that time, and has no other permanent residence.
• Income-producing property such as a family farm, business or rental, where the family’s income would otherwise fall below 250% of the federal poverty guideline.
• A credit for reasonable costs of maintaining the home.
• Administered estates with a gross value of $2,400 or less, where there is an heir.

If you are the executor

The executor or administrator must find out whether your parent received Medical Assistance in the five years before death and, if so, notify DHS and ask for a statement of claim. That five-year window is for the notice only; it does not limit what DHS can claim. DHS must submit its claim within 45 days of receiving a complete, correctly addressed notice, or the claim is forfeited (62 P.S. § 1412(b); 55 Pa. Code § 258.4). An executor who distributes the estate without satisfying a DHS claim can become personally liable for it (62 P.S. § 1412(a.1); 55 Pa. Code § 258.8). The DHS Estate Recovery Program can be reached at (800) 528-3708.

Where families get tripped up

• Adding a child’s name to the deed or bank account “to make it simple”. It can be treated as a transfer and start a penalty.
• Paying a sibling caregiver with no written agreement.
• Relying on a power of attorney with no gifting clause.
• Distributing the estate before DHS answers. The executor carries the risk.
• Assuming the home is always safe. It can be excluded during your parent’s lifetime and still be reached after death if it passes through probate.

What to do in the next 30 days

1. Find the power of attorney and check whether it allows gifts.
2. Pull five years of statements for every account.
3. List every gift or transfer in that period.
4. Note who lives in the home, since when, and who gives care.
5. If your parent is married, gather both spouses’ asset records.
6. Talk to us before moving any money.

Common questions

Does Pennsylvania really look back five years?

Yes. The look-back is 60 months from the application date (55 Pa. Code § 178.104a(a)).

Can Medicaid take my parent’s house?

Not while it is excluded during your parent’s lifetime. After death, estate recovery can reach the home if it passes through the probate estate, subject to the postponements and hardship waivers described above.

Does the estate owe Medicaid if everything was held jointly?

Property held jointly with right of survivorship passes outside the probate estate, and estate recovery does not reach it (55 Pa. Code § 258.3).

How we work with families

We work with families in Bethlehem and across the Lehigh Valley. The first conversation is usually about timing and what has happened to your parent’s money in the last five years. If you decide to go ahead, we give you a written fee proposal before any work begins.

Joseph F. Leeson III trained and practiced as a CPA before he practiced law, with four years in tax accounting. He holds a JD from Indiana University Maurer School of Law and an MBA in accounting from DeSales University. He was born and raised in Bethlehem, and practices at Leeson & Co. Read more about Joseph F. Leeson III.

Call 610-691-3350 | Request a 30-minute conversation

If a parent is already in the hospital or a care facility, say so when you call and we will tell you what needs doing first.

This page explains general principles of Pennsylvania law and is not legal advice for your situation. Medicaid limits and figures change every January. Please speak to us before acting on anything here.