Illinois Medicaid's 5-Year Look-Back Rule, Explained

If your parent might need nursing home care someday, the look-back rule is worth understanding before you move any money around. Families run into it by surprise more often than you'd think.

The 60-month rule

When someone applies for Illinois Medicaid long-term care, the state reviews five years of financial activity. Giving assets away, or selling them for far less than they're worth, can trigger a penalty period when Medicaid won't pay for care, even if your parent otherwise qualifies.

How the penalty works

The length of the penalty comes from dividing the amount transferred by a monthly nursing home cost figure the state sets. It generally starts once your parent is in a facility, has applied, and would otherwise be eligible. That means the family may have to cover care costs during that stretch.

What counts as a transfer

Spending on your parent's own needs usually isn't a problem. Gifts are, and the federal gift tax exclusion doesn't protect them from Medicaid review. Some transfers are exempt, such as those to a spouse or a disabled child, and in some cases to a child who lived in the home and provided care for at least two years.

Get your records together

Plan on needing about five years of statements for every account, including closed ones.

Read the full article, including the house, spousal protections, and local help.

More at genxlifehub.org. This is general information, not legal advice. Rules change and every situation is different, so talk with an elder law attorney before making transfers.

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