Health & Benefits

Medicaid is a needs-based program. It is meant to help pay for long-term care only after a person has used their own available assets. Anything a person owns that has financial value

If someone gives away money or property shortly before applying for Medicaid, it can look like they were trying to reduce their assets just to qualify. Because of that, Illinois reviews financial transactions made during a specific time period before someone applies for long-term care Medicaid.

The state will look at financial transactions made during the 60 months (or five years) before they applied for Medicaid for long-term care. This is called the “look-back period.” During this period, the state checks whether the applicant or their spouse:

• Gave away money or property, or
• Sold something for less than its fair market value. The price that a normal buyer would pay

If these types of transfers happened during the look-back period, a person can't get Medicaid for a certain amount of time. This is known as a “penalty period.” This is true even if someone is financially and medically eligible for Medicaid at the time they applied. People are responsible for paying for their own long-term care during the penalty period.

It depends on the value of the transfers and the current average monthly cost of long-term care. Illinois adds the total value of all transfers made for less than fair market value The price that a normal buyer would pay during the look-back period.

That total is divided by the average monthly cost of nursing home care in the specific nursing home a person wants to live in. The result is the number of months Medicaid will not pay for long-term care.

For example: If someone transferred $60,000, and the average monthly cost for the nursing home they want to live in is $6,000, the penalty period would be 10 months.

The larger the transfer, the longer the penalty.

The penalty period will begin on the later of the following dates:

• The first day of the month when the transfer for less than FMV is made,
• The date the applicant entered a nursing home and was found Medicaid eligible, including meeting any spend-down requirement and following any days fully covered by Medicare,
• The first month that can be affected for an ongoing case allowing for timely written notice to be given to someone, or
• If a prior penalty period has not expired, the day following the day the prior penalty period ends.

Yes. Certain transfers are allowed under federal and Illinois law and do not result in a penalty. These include transfers to:

• A spouse,
• A child under age 21, and
• A child of any age who is blind or has a disability A substantial impairment that functionally limits a person in carrying out major life activities, such as walking, lifting, seeing, or learning. (as determined by SSA or IDHS).

In some cases, transferring property to a sibling with an ownership interest in the transferred home is allowed. The sibling must have lived there for the year immediately before the Medicaid applicant entered the long-term care facility. The transfer is also allowed if the sibling lived in the home for one year before the date the person applied for or received Illinois Department on Aging (DoA) home- and community-based waiver A document that gives up a legal right or excuses a requirement services (HCBS).

Transfers to an adult Any person 18 years old or over child who provided nursing or support care might also not result in a penalty. The child must have lived in the home for at least two years immediately before the date the person entered the long-term care facility. Transfers to an adult child are also allowed if they lived in the home for at least two years before the person applied for or received DoA HCBS. The Medicaid recipient must provide proof that they needed an institutional level of care, that their adult child provided that care, and the adult child lived in the same home for two years before receiving long-term care services.

Because the rules are specific and fact-dependent, these exceptions should be reviewed carefully.

Yes, people will have the right to appeal A request to change a court's decision the decision to apply a penalty period. The denial When a court rejects or refuses to allow a request; for example, when a judge decides not to grant an attorney's objection. letter will say how long someone has to appeal the decision. The appeals deadline can be as short as ten days if you want to maintain your benefits or services, so appealing quickly is important. Learn more about appealing Medicaid decisions.