Medicaid is designed to help those who can't help themselves and to help those who don't have sufficient assets for the entire time that health care services are needed. However, difficulties can arise when fraud is suspected.
Since Medicaid is only supposed to be available for people who do not have the means to support themselves the government is concerned about elderly people transferring their assets to qualify for eligibility. State agencies will scrutinize any transfer of assets within the prior five years of applying for Medicaid eligibility.
This is known as the "Look-back period."
Elder Law Answers recently discussed how it works in "How Does the Medicaid Look-Back Period Work?"
The key thing to keep in mind is that not all transfers are disqualifying. Transfers made for fair market value are perfectly acceptable. It is transfers of assets for below value that can get an applicant in trouble.
Thus, you can sell a home through a realtor to an independent third-party for market value, but you cannot sell a home to a perfectly able adult child for pennies on the dollar. Some transfers for less than fair market value are allowed as well. For example, transfers to a spouse or a disabled child are allowed.
There are different rules for allowable home transfers as well.
An elder law attorney can guide you in the proper transfer of assets should the need arise.
Reference: Elder Law Answers (March 23, 2016) "How Does the Medicaid Look-Back Period Work?"