Alabama Medicaid's own application guidance tells caseworkers to look back 60 months before the application date to review how an applicant spent income or resources. This transfer rule, spelled out in the Agency's Chapter 25 eligibility rule, applies to both institutional Medicaid and home- and community-based waiver services whenever an applicant or spouse transfers an asset for less than fair market value within that window.
This isn't calculated the way a gift tax would be. Under Alabama's rule, the relevant figure is the uncompensated value — simply the gap between what the asset was actually worth and what the applicant received for it. That gap can trigger a period during which Medicaid won't pay for institutional-level services, even if the applicant is otherwise financially and medically eligible.