Health & Benefits
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When you apply for Medicaid coverage for long-term care services, the state will look back to see if you or your spouse transferred assets for less than fair market value during the "look-back period." The look-back period is five years. The state will look at any assets transferred during that time. If you or your spouse transferred assets for less than fair market value during the look-back period, you will not be able to get Medicaid for a time known as a "penalty period."
The penalty period will begin on the later of the following dates:
- The first day of the month in which the asset transfer for less than fair market value is made, or
- The date you enter a nursing home and are found Medicaid eligible, including meeting any spenddown requirement.
The Illinois Department of Healthcare and Family Services decides the length of the penalty period based on the "uncompensated value" of the asset transfers. Uncompensated value means the difference between the fair market value and the actual money received.
Transferring assets will not always trigger the penalty. For example, there is no penalty for transferring your home to certain people, such as a spouse, a child under 21, or a child who is blind or has a disability . There is also no penalty for other asset transfers to:
- a spouse,
- a trust for the benefit of a child who is blind or has a disability, or
- a trust for the sole benefit of a person with a disability under age 65.
The Illinois Department of Healthcare and Family Services must notify you if you are subject to a penalty period. They must give you notice at least 10 days before the penalty period. The notice has to tell you about your period of Medicaid ineligibility for long-term care services. The notice must also tell you that you can appeal the penalty decision.
Worried about doing this on your own? You may be able to get free legal help.
