The Michigan Medicaid look-back period: gifts, paying a relative to care for a parent, and Home Help

The short answerMichigan Medicaid looks back 60 months (five years) from a person's baseline date for gifts and other transfers for less than fair market value. If it finds one, the result is a penalty period, and eligibility for Home Help is one of the events that sets the date the look-back counts from. Nothing here promises an outcome, and a Michigan elder law attorney can look at your parent's actual facts.

If you are already caring for a parent, you may be wondering whether she can pay you, or whether something she gave away years ago will cause trouble. This page explains the look-back in plain words. Already Caring is a private company and not a government agency, and we are not a law firm. This is general information, not legal advice. The quotes below come from Michigan hearing decisions that quote the State's manual, because we could not open the manual item itself.

What the look-back is

Michigan's divestment policy is item BEM 405, "MA Divestment," in the MDHHS Bridges Eligibility Manual. We found it listed in the manual's table of contents (BPB 2026-022, 8-1-2026). Two hearing decisions, MOAHR 20-004517 (September 14, 2020) and 22-003690 (October 31, 2022, quoting the manual as of January 1, 2022), quote its definition. Divestment "means a transfer of a resource" for "less than fair market value" that is "not excluded by policy," made "within 60 months of the baseline date."

So the look-back is 60 months, counted back from the baseline date. A later hearing judge (MOAHR 22-003545, September 23, 2022) summarized the result in his or her own words: divestment results in a penalty period, not MA program ineligibility. That is the judge's summary of the manual, not a quote from it.

Why it matters for Home Help

The baseline date shows that Home Help eligibility can matter too. In MOAHR 23-006427 (December 12, 2023), the judge quotes BEM 405 (January 2023, page 6): "A person's baseline date is the first date that the client was eligible for Medicaid and one of the following: (i) in LTC; (ii) approved for the waiver; (iii) eligible for Home Health services; or (iv) eligible for Home Help services."

Eligibility for Home Help services is on that list. The waiver manual item, BEM 106, also says: "The MA divestment policy in BEM 405 applies to waiver participants" (BEM mobile manual, issued 8-03-2026). If your parent is thinking about Home Help, the gifts she made in the five years before her baseline date are part of the picture. Our guide to Michigan Medicaid income and asset limits covers the separate question of what she can own.

How a penalty is figured

The same decision (MOAHR 23-006427, quoting BEM 405 January 2023, pages 12 and 13) says: "The Department computes the divestment penalty period on the total uncompensated value of the resources divested." It "divides the uncompensated value by the average monthly private LTC cost in Michigan" "for the client's baseline date." MOAHR 20-004517, quoting pages 14 and 15, says the penalty period starts on "the date which the individual is eligible for Medicaid."

The Morello Law Group, a Michigan elder law firm, reported in February 2026 that "the divestment divisor is one month for every $12,216.30 divested." That is a law firm's figure and not an MDHHS source, so confirm the current number with the county office or an attorney.

Illustration only: at that divisor, giving away $24,432.60 would work out to about two months of penalty. Your parent's own numbers will differ, and the State makes the real calculation.

Transfers that are not divestment

Not every transfer counts. The Morello Law Group lists these as not divestment:

• homestead transfers to a spouse, or to a blind or disabled child
• transfers to a spouse
• converting a countable asset to a non-countable asset of equal value
• payments of an individual's personal debts and expenses

These are exceptions the sources describe. No one should move property to fit one without talking to an attorney first.

MOAHR 20-004517 quotes BEM 405 (pages 10 and 11): "it is not divestment to transfer a homestead to the client's" followed by a list that includes a "Blind or disabled child" and a "Child under age 21." The list has other conditions that we have not confirmed, so ask an attorney before assuming a transfer of a home is safe.

Paying a relative to care for a parent

This is the part that matters most to family caregivers. In MOAHR 22-003690, the judge quotes BEM 405 (January 1, 2022) as saying that personal care agreements, "regardless of whether between a client and a relative or a client and a non-relative," "must be considered and evaluated for divestment." They "shall be considered a transfer for less than fair market value unless the agreement meets all the following." Among the conditions the decision quotes:

• "The services must be performed after a written legal contract/agreement has been executed."
• "The contract/agreement must be dated, and the signatures must be notarized."
• "The services are not paid for until the services have been provided."
• The services "must have been recommended in writing and signed by the client's physician."

We have only these four, and the decision says "all the following," so the full list may be longer. A second decision, MOAHR 23-000371 (April 10, 2023), quotes BEM 405 as saying: "When relatives provide assistance or services they are presumed to do so for love and affection." It also says "compensation for past assistance or services shall create a rebuttable presumption," and "Fair market value of the services may be determined by consultation with area businesses."

The stakes are real. In 22-003690, payments to 12 home care workers that did not meet the conditions led to a penalty of 8 months and 4 days. Because of this, a parent who wants to pay a relative for care should talk to an elder law attorney before the first payment. MOAHR 23-000371 quotes BEM 405 saying that compensation for past assistance or services "shall create a rebuttable presumption," so ask before paying anyone for care already given.

How Home Help pay is different

In Home Help, the State pays the provider, whether an individual caregiver or an agency, for authorized tasks. The parent is not transferring her own money in that case. Our guide to whether Medicaid pays family caregivers explains how that works. We are not saying that being a Home Help provider can never raise a divestment question. A private arrangement where the parent pays a relative from her own funds is the situation the personal care agreement conditions above describe.

Questions to bring to an elder law attorney

• What is my parent's likely baseline date, and what gifts or transfers fall inside the 60 months before it?
• What is the current divisor, and how would a penalty be figured for her?
• If she wants to pay me for care, what must the written agreement say, and what else is required (notary, physician recommendation, timing of payment)?
• Does a past payment to a family member count as a transfer?
• Does a transfer of her home qualify as an exception, given the conditions on the list?
• Who should sign for her? See our guides to power of attorney for a parent and guardianship of a parent.
• How does this fit with estate recovery and a spend-down deductible?

Your county MDHHS office can also tell you what it needs to see. We cannot say how it will treat any one transfer.

Questions families ask

How far back does Michigan Medicaid look?

The hearing decisions quote BEM 405 as covering transfers made within 60 months of the baseline date. That is five years. The baseline date is the first date the person was eligible for Medicaid and one of the following: in long-term care, approved for the waiver, eligible for Home Health services or eligible for Home Help services.

Does the look-back apply to Home Help?

Eligibility for Home Help services is one of the events that sets the baseline date, according to BEM 405 as quoted in MOAHR 23-006427. Confirm how it applies to your parent with the county MDHHS office or an elder law attorney.

What is the penalty for giving money away?

It is a penalty period, a set stretch of time, according to a hearing judge's summary of BEM 405. The Department divides the total uncompensated value by the average monthly private long-term care cost in Michigan for the baseline date. A Michigan elder law firm reported a divisor of one month of penalty for every $12,216.30 divested in 2026, so $24,432.60 given away would be about two months, as an illustration only. Confirm the current figure.

Can my parent pay me to care for her?

BEM 405, as quoted in hearing decisions, says personal care agreements with relatives must be evaluated for divestment and are treated as transfers for less than fair market value unless they meet the conditions. Those include a written, dated and notarized agreement made before services begin, no payment until the services are provided, and a physician's written recommendation. Talk to an elder law attorney before any payment is made.

Is paying for my parent's own bills divestment?

The Morello Law Group lists payments of an individual's personal debts and expenses as not divestment. Keep records and ask an attorney how that applies to what your parent paid.