Medicaid Enrollment and Intergenerational Transfers of Wealth Among Older Adults

Medicaid look-back periods are meant to prevent Medicaid applicants from gifting assets to meet eligibility requirements. These policies have the potential to affect families across generations given their ability to restrict the transfer of assets between parent and child.

Using 2008-2018 data from the Health and Retirement Study, this study analyzed the estate planning and familial wealth transfer behaviors of a cohort of older adults aged 65 and older who became Medicaid recipients during a 10-year period.

There were 8,347 respondents aged 65 and older in 2008 and 11.96% of respondents who were not Medicaid recipients at baseline became recipients over the study period. A little more than one third (36.47%) of Medicaid recipients participated in estate planning and asset transfer prior to becoming a recipient, with significant differences among select demographic characteristics. Married recipients were more likely to transfer money compared to their widowed counterparts (51.69% compared to 36.44%; p < .001) and transferred larger amounts compared to those unmarried ($16,286.94 compared to 5,379.13). White, well-educated, married, men participated in higher rates of estate planning, likely a reflection of who has access to resources to make necessary arrangements early.

This analysis concludes that more structurally advantaged groups are more likely to engage in estate planning prior to Medicaid enrollment. This analysis demonstrates that some individuals may circumvent Medicaid policies like look-back periods and estate recovery, while others cannot. Policymakers should consider policies that promote the financial health of low-income families.