---
type: Authority
title: 42 U.S.C. §1396p (Medicaid liens, estate recovery, and transfer penalties)
description: The federal statute that governs Medicaid liens, estate recovery from deceased recipients, and the penalty for transferring assets for less than fair market value within the five-year look-back.
resource: https://www.law.cornell.edu/uscode/text/42/1396p
tags: [medicaid, look-back, transfer-penalty, estate-recovery, federal]
timestamp: 2026-06-22
jurisdiction: Federal
author: Patrick Nolan
authority_type: statute
citation: 42 U.S.C. §1396p
---

# Summary

42 U.S.C. §1396p is the federal Medicaid statute that controls three things long-term-care planning turns on: when a lien may attach to a recipient's property, when a state may recover paid benefits from a deceased recipient's estate, and how transferring assets for less than fair market value delays eligibility. Missouri administers these rules through MO HealthNet.

# Operative text

The section has three operative parts, paraphrased:

- Subsection (a) limits when a state may place a lien on the real property of a living Medicaid recipient.
- Subsection (b) authorizes states to recover correctly paid long-term-care benefits from the estate of a deceased recipient; this is estate recovery.
- Subsection (c) requires a penalty period of ineligibility when the applicant or spouse transfers assets for less than fair market value during the 60-month look-back before applying for long-term-care Medicaid. The penalty length is the uncompensated value divided by the average monthly private-pay cost of nursing-home care; the 60-month window was set by the Deficit Reduction Act of 2005.

Read the full section at the official source linked above.

# Decision rule

If an applicant or spouse transferred assets for less than fair market value within the five years before a long-term-care Medicaid application, expect a penalty period; structure any protective transfer to clear the 60-month window well before care is needed.

# Related

- [The Medicaid Look-Back Period in Missouri](/okf/elder-law-medicaid/look-back-period.md)
- [42 U.S.C. §1396r-5 (spousal impoverishment)](/okf/authorities/federal/42-usc-1396r-5-spousal-impoverishment.md)
- Official source: https://www.law.cornell.edu/uscode/text/42/1396p