Since the money would be spent on someone other than himself, it is deemed a gift for Medicaid eligibility purposes. As such, if he would applies for Medicaid within the next five years after the date of the gift, it would count against him, i.e., cause a period of disqualification, known as a penalty period.
By the way, it doesn’t matter which spouse makes the gift. The penalty attaches to the gift regardless of which spouse makes the transfer, if either spouse applies for Medicaid within the following five-year period.
