Illinois Implements changes to the Medicaid eligibility rules for long-term care as directed under the Deficit Reduction Act of 2005 (DRA)

For Medicaid applications for long-term care nursing care filed on or after January 1, 2012, Illinois will apply its new rules that incorporate changes required by the DRA.  The rules increase the look-back period from 36 months to 60 months and significantly alter the methodology for determining the penalty periods imposed on family gifting plans.  Other common planning strategies to accelerate eligibility for Medicaid to cover the cost of long term care have also been impacted, including among other changes: the exemption for transferring the home to a child who has resided in a home with a parent for at least two years (“the caretaker child exception”), personal care agreements, prepaid burial plans, and imposing a limit of $750,000 on the equity in an applicant’s home.

 With Illinois’ implementation of the DRA, clients who have incorporated planning strategies to accelerate eligibility for Medicaid to cover long term care or who may need to do so in the future, should contact our office to understand how the post-DRA rules may affect them.