Illinois Medicaid Long Term Care Eligibility
Illinois Long Term Care
1. Residency and Citizenship – the applicant must be an Illinois resident and be a U.S. citizen or have proper immigration status.
2. Age/Disability – the applicant must be age 65 or older, or blind, or disabled. The applicant must meet certain medical requirements consistent with the level of care requested.
3. Income Limitations – the applicant’s income (from all sources) must be less than the cost of care at the private pay rate. There is a personal needs allowance of $30/month that is not factored into the total countable income.
4. Asset Limitations (Exempt vs. Available) – Medicaid divides assets into two categories: Exempt and Available. Exempt assets are specifically designated under the rules, and ownership of an exempt asset by the applicant will not result in a denial of benefits. If an asset is not listed as exempt then it needs to be liquidated and applied toward the costs of nursing home care before the applicant can receive Medicaid benefits.
a. Exempt Assets for a single applicant in Illinois include:
i. $2,000 or less in cash/non-exempt assets;
ii. Personal effects and household goods.
iii. Homestead (limited to $585,000 equity value)
iv. A motor vehicle – absent certain exceptions, exempt up to $4,500 in value;
v. Life insurance with total face value of $1,500 or less and term or other life policies with no cash value;
vi. Burial spaces and irrevocable pre-paid burial contracts subject to a $5,874 limit for goods and services, not including burial spaces (formerly $10,000 limit under DRA).
Homestead held in trust is not a homestead. A homestead held in trust is not exempt unless the applicant’s spouse, minor child, or disabled adult child resides there.
b. Spousal Rules:
Community spouse resource allowance: The community spouse can keep one-half of all non-exempt resources owned by one or both spouses with a maximum value of $109,560. All non-exempt resources of both spouses are available to pay for the costs associated with long term care.
Amount of income community spouse may retain: The amount of monthly income the community spouse may retain for self-support has been reduced to $2,739. Income in excess of this value is available to pay the nursing home spouse’s care costs.
Spouse’s refusal to disclose assets results in denial. Eligibility for long-term care assistance will be denied if the community spouse or institutionalized spouse refuses to disclose assets during the application process. With the new change, the community spouse may be required to divorce the nursing home spouse and “enforce” the prenuptial agreement to preserve his/her separate assets from the nursing home spouse’s care costs.
c. Farmland and Trusts:
Income producing farmland and farm equipment no longer exempt. In past versions of the DRA, income producing farmland and equipment were exempt assets (subject to the state’s lien rights) that would not disqualify an applicant from eligibility if all other income/asset requirements were satisfied. The theory of the exemption was that allowing the applicant to retain the income from the farm rather than liquidating the asset would permit the applicant to pay more toward their own care costs, thus reducing the monthly expenditure by the state. The state retained its lien rights on the farm value so that it could recoup any Medicaid payments made during the applicant’s life. The SMART Act removes that exemption and caps the equity value for income producing property at $6,000. This cap essentially revokes the farmland exemption.
Self-settled disability trust subject to transfer penalty: an irrevocable trust containing the assets of a disabled applicant were typically exempt if the trust was established and managed by a qualifying non-profit association and amounts remaining in the trust upon death of the disabled individual would be used to reimburse the state for Medicaid payments expended. Transfers to this type of irrevocable trust by a personage 65 or over will be treated as transfers for less than fair market value, resulting in a period of ineligibility unless the disabled person is a ward of the state or county public guardian.
Review the new rules and the related Policy Manual and Workers Action Guide.
See also: Illinois Long Term Care