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Robertson Legal Group, LLC

Medicaid Planning

Medicaid Planning


What is Medicare?

Medicare is a federal health insurance program for the following people:

  • People who are 65 or older
  • Certain qualifying younger people with disabilities
  • People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called “ESRD”)


Simply put, Medicare provides federal health insurance benefits to seniors over the age of 65 years of age.  Medicare Part A provides hospital insurance, which covers (if you qualify) certified skilled nursing care.  The skilled nursing care must be medically necessary for your family member to receive this benefit.  However, most skilled nursing home care is custodial care, which is assistance bathing and dressing. 

Any person is eligible for Medicare who has reached age 65 and receives social security benefits.  There are no premiums and no charge for Medicare.  If you qualify for Medicare Nursing Home Care, it is limited to the first 100 days.  https://medicare.com/coverage/does-medicare-cover-nursing-home-care/

Unfortunately, Medicare does not pay for long-term nursing home care.  Many seniors and elderly in the Yorkville, Oswego, Plano, Shorewood, Minooka, Bristol, Newark, Lisbon, Aurora, and Montgomery Il areas must fund their long-term nursing home care.  Many seniors pay cash for care givers to come into the home or use home health care services to provide care for seniors.

What is Medicaid?

Medicaid is a State of Illinois administered federally funded program for seniors who fit the income and asset limits.  Simply put, Medicaid is a jointly paid for service in combination with the State of Illinois and the Federal government.  In Illinois, a person must qualify for Medicaid assistance.  Many families thrive to qualify for Medicaid Assistance to protect their hard-earned assets. 

Generally, in Illinois, there are four (4) major ways people pay for long-term nursing care.

  1. Private Pay. Families pay a care giver out of their funds.  A care giver may assist the senior with bathing, cooking, and or dressing or whatever needs they face.  Long term nursing home coverage generally ranges from $6,000 to $12,000 per month with the average being around $6,000 to $8,000 per month in the region.
  2. Long-Term Care Insurance. Long-term care insurance is insurance that covers long-term nursing home care.  Many seniors fail to qualify for long-term care insurance or were untimely meaning that when they wanted to purchase long-term care insurance, it was unaffordable, or they could not qualify.
  3. Medicare. As discussed earlier, Medicare in the best-case scenario pays for up to 100 days of nursing home care.
  4. Medicaid. A State of Illinois administered program for seniors that qualify based upon assets and income restrictions.  Generally, a senior must have only $2,000 worth of assets, which are non-exempt assets.  Medicaid has a list of exempt and non-exempt assets, which they consider for Medicaid eligibility.  An exempt asset is an asset that is not considered for Medicaid eligibility.  A non-exempt asset is an asset that is considered for Medicaid eligibility.

Medicaid Eligibility

We will first discuss what assets are exempt from consideration for Medicaid eligibility.  In Illinois, here are the following categories of exempt assets (which are not considered for Medicaid eligibility):

  • $2,000 or less in cash or non-exempt assets (single persons) or $3,000 in assets for married couples
  • Personal affects and household goods
  • Real Estate Primary Home. $572,000 in fair market value is limited to $572,000
  • One Motor vehicle which is used as their primary car to transport them to and from doctor’s appointments. The community spouse (of the Medicaid eligible spouse) may also maintain a car used for their daily needs.
  • Irrevocable burial accounts are exempt and revocable burial accounts are exempt up to $1,500

https://www.familyassets.com/nursing-homes/resources/medicaid/illinois and https://www.seniorplanning.org/long-term-care-medicaid-eligibility/illinois/


You become eligible for Medicaid in one of three ways:

  1. You naturally qualify for Medicaid. You meet the income and asset levels naturally.  Most Medicaid planning clients do not fall into this category.
  2. You “spend down” your assets to qualify. Spend down your assets means that you literally spend the following types of assets:
  • Checking and Savings Accounts
  • 401(k) and IRAs
  • Rental Property
  • Non-eligible automobiles
  • Money Market Accounts
  • Annuities
  • Whole Life Insurance Policies exceeding $1,500 in cash value
  • Any non-exempt asset
  1. Medicaid Trust or Irrevocable Trust. You work with a Medicaid Planning Attorney to plan the transfer of your assets outside of the control of the elderly or senior person seeking Medicaid eligibility.

Here, in this article, we will discuss the third option, which is a Medicaid Trust or Irrevocable Trust.  A Medicaid Trust is an Irrevocable Trust, which cannot be changed after it is created.  An Irrevocable Trust, is unlike a Revocable Trust because it cannot be amended, altered, or changed.  A Revocable Trust can be altered, changed, or amended.  Thus, a Revocable Trust is not proper if you want to protect your assets. 

In Illinois, Medicaid can reverse and penalize any improper transfer for a period of 60 months (or 5 years).  It is called the “5 year look back rule”.  The 5 year look back rule applies to transfers or gifts that were made within 5 years of the Medicaid Application.  Improper gifts may be the following types of transfers:

  • Quit claim deeds of real estate property to family members
  • Transfers of checking and savings accounts to family members or others
  • Any gifts of cash or other assets

Essentially, the improper transfers are transfers, which the senior person did not get a fair market value for the item. 

The purpose of the Irrevocable Trust or Medicaid Trust is to protect a family’s assets and to qualify for Medicaid coverage.  Robertson Legal Group, LLC assist seniors and their loved ones with Medicaid Planning and Estate Planning.

CONTACT US NOW AT 630-780-1034

Call Robertson Legal Group, LLC at 630-780-1034 to discuss your elder law, Medicaid planning, and estate planning needs.  Our attorneys regularly work with families and seniors with regards to protecting their assets from nursing home costs.


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