Yes. If someone transfers property for less than fair market value within five years of applying for Medicaid, they will be subject to a penalty period. This penalty is a period of time during which the person transferring the assets will be ineligible for Medicaid. However, if the property is returned to the Medicaid applicant, the return “cures” or eliminates the Medicaid transfer penalty. With the returned property, the Medicaid applicant may have excess assets that will need to be spent down in order to qualify for Medicaid. Applying for Medicaid is a complicated process. To find out the best strategy for dealing with assets, talk to an elder law attorney.