Long-term care insurance covers the risk that you may at some point in your life need nursing home care, assisted living, or in-home care — and it pays for some or all of the expenses associated with that care. Nursing home costs vary significantly depending on the quality of the facility and the region of the country, but in Illinois, nursing home care commonly costs $8,000 to $12,000 or more per month. At that rate, even a substantial nest egg can be depleted in just a few years.

Long-term care insurance can be a valuable tool that helps you avoid spending down your savings to qualify for Medicaid. However, not everyone can afford it, and not everyone qualifies for it — many policies require applicants to meet health eligibility standards, and premiums increase significantly with age. If you already have a long-term care policy, it is important to review what it covers, as many policies have high deductibles or only cover a limited period of nursing home care. Even policyholders often end up needing to rely on Medicaid for extended care.

Medicaid is a joint federal-state program that pays for nursing home care and other long-term care services for individuals who meet financial eligibility requirements. It is not to be confused with Medicare — Medicare is a program that people pay into during their working years and provides limited coverage for skilled nursing care, while Medicaid is a needs-based program that covers extended nursing home care for those who qualify financially.

Medicaid planning is the process of legally arranging your assets and finances to help you or a loved one qualify for Medicaid benefits while preserving as much of your estate as possible for your family. It involves working with an elder law attorney to understand Illinois Medicaid eligibility rules, identify and implement legal strategies to protect assets, and navigate the application process.

Common Medicaid planning strategies used in Illinois include:

• Spending down countable assets on exempt items or prepaid expenses in a Medicaid-compliant way
• Converting countable assets to exempt assets — such as home improvements, a new vehicle, or prepaid funeral arrangements
• Medicaid-compliant annuities — converting assets into a stream of income in a way that may reduce countable assets
• Irrevocable trusts — certain types of trusts can be used to protect assets, though they must be established outside the five-year look-back period to avoid transfer penalties
• Spousal protection planning — ensuring the community spouse (the spouse not entering the nursing home) retains sufficient income and assets under Illinois and federal Medicaid rules

Medicaid rules in Illinois are complex and change frequently. What works in one situation may not work in another. It is essential to work with an experienced elder law attorney before taking any steps that could affect Medicaid eligibility.

No — Medicare does not provide coverage for long-term nursing home care, which is one of the most common misconceptions in elder law planning. Medicare will pay for up to 100 days of skilled nursing care per illness, but only under specific conditions: the patient must first be hospitalized for the illness, and the nursing home care must provide a level of skilled care that couldn’t be provided at home or on an outpatient basis. After 20 days of nursing home care, a significant daily copayment is required for the remainder of the stay — and after 100 days, Medicare coverage ends entirely.

Medicare will also pay for home health benefits if you are housebound and a doctor has ordered home health services, at least some of which are skilled. Medicare covers up to 35 hours of services per week, and patients are responsible for 20% of the cost of medical supplies and equipment.

For extended nursing home care beyond what Medicare covers, the options are generally private pay (using your own savings), long-term care insurance, or Medicaid. This is why Medicaid planning is so important for Illinois families — by the time Medicare coverage ends, costs can be catastrophic without a plan in place.

Yes — Medicaid planning is completely legal. Elder law attorneys work within the bounds of the law to help clients protect their assets and qualify for benefits they are entitled to receive. Congress establishes the rules for Medicaid eligibility, and those rules expressly permit certain planning strategies. Medicaid planning is no different in principle than tax planning — both involve using legal tools to minimize financial burdens within the framework the law allows.

The key distinction is between legal Medicaid planning — which works within the rules — and fraudulent transfers, which involve hiding assets or misrepresenting financial information on a Medicaid application. Fraudulent transfers can result in denial of benefits, repayment obligations, and potential criminal liability. Working with a qualified elder law attorney ensures that your planning is done correctly and legally.

Illinois Medicaid has a five-year (60-month) look-back period for nursing home Medicaid. This means that when you apply for Medicaid, the state reviews all asset transfers — gifts, transfers to children, transfers to trusts — that were made in the five years before your application date. Any transfers made for less than fair market value during this period may be treated as disqualifying transfers and result in a penalty period during which Medicaid will not pay for your care.

The penalty period is calculated based on the value of the transferred assets divided by the average monthly cost of nursing home care in Illinois. For example, if you gifted $100,000 to your children two years before applying for Medicaid, Illinois may impose a penalty period during which you would be ineligible for Medicaid benefits — even if you otherwise qualify financially.

This is why early planning is so critical. Strategies that can protect assets when started well in advance may be unavailable — or subject to penalties — if done after a nursing home need arises. Our attorneys help DeKalb County families understand the look-back rules and plan accordingly.

There is no simple answer to this question — the timeline varies depending on your specific circumstances. Factors that affect how long it takes to become Medicaid-eligible in Illinois include your current assets and income, any asset transfers made in the past five years, whether your application is complete and properly documented, and how quickly the Illinois Department of Healthcare and Family Services processes your application.

If you have not made any disqualifying transfers and your assets and income are within Illinois Medicaid limits, you may be able to qualify relatively quickly once the application is submitted. If you have excess assets or recent transfers, planning steps may need to be taken first — which can add time. And if your application is incomplete or documentation is missing, the process can be significantly delayed.

Before applying for Medicaid in Illinois, you should consult an elder law attorney. Our attorneys can evaluate your situation, advise you on eligibility, help you gather the required documentation, and give you a realistic estimate of the timeline for your specific circumstances.

No — withdrawals from a joint account by a child can be treated as a transfer of assets from you to that child, which could trigger a Medicaid penalty. Illinois Medicaid applies a five-year look-back period on transfers of assets. Any gifts or other transfers made in the 60 months before you apply for Medicaid will be reviewed to determine whether they were made for less than fair market value — and if so, a penalty period may be imposed during which Medicaid will not pay for nursing home care.

Joint accounts are particularly tricky in the Medicaid context because funds in a joint account are typically counted as belonging entirely to the Medicaid applicant — even if the other account holder contributed the money. Similarly, withdrawals by a joint account holder can be treated as transfers by the applicant.

If your children have taken money from a joint account in the past five years, do not apply for Medicaid without first consulting an elder law attorney. The penalties can be severe, and an attorney can help you understand your options and present your situation to the state correctly.

Federal and Illinois Medicaid law provide important protections for the spouse who remains at home — called the “community spouse” — when the other spouse enters a nursing home and applies for Medicaid. Without these protections, Medicaid’s asset and income rules could leave the community spouse with very little to live on.

The two main protections are:

• Community Spouse Resource Allowance (CSRA) — The community spouse is permitted to keep a portion of the couple’s combined countable assets. In Illinois, the community spouse may keep up to approximately $154,140 (as of 2025, adjusted annually) in countable assets, in addition to exempt assets such as the family home, one vehicle, and personal belongings.
• Minimum Monthly Maintenance Needs Allowance (MMMNA) — The community spouse is entitled to a minimum monthly income. If the community spouse’s own income falls below this amount, he or she may be entitled to receive a portion of the nursing home spouse’s income to make up the difference.

Spousal protection planning can be complex, and the rules involve numerous calculations and exceptions. Our elder law attorneys help DeKalb County families navigate these rules to ensure the community spouse is protected while the nursing home spouse obtains Medicaid benefits.

Selecting a nursing home is one of the most important decisions a family can make, and it deserves careful research. Key factors to consider include:

• Licensing and ratings — Check how the facility is rated by state regulators and accreditation agencies. Illinois nursing homes are inspected and rated by the Illinois Department of Public Health. Review any recent violations or complaints on file.
• Quality of care — Visit the facility in person, ideally at an unscheduled time so you see daily operations as they normally occur. Observe interactions between staff and residents — do staff seem engaged and compassionate? Do residents appear content and well cared for?
• Staffing levels — Ask about staff-to-resident ratios and staff turnover rates. High turnover can be a red flag for care quality.
• Location — Is the facility conveniently located for family and friends to visit regularly? Frequent visits from loved ones have a meaningful impact on a resident’s wellbeing.
• Medicaid participation — If you anticipate needing Medicaid to fund the care, confirm that the facility accepts Medicaid. Not all nursing homes do, and some have limited Medicaid beds.
• References — Ask for references from family members of current residents, and follow up on them.

The process of choosing a nursing home can feel overwhelming, but after visiting a few facilities and evaluating their quality of care, the decision often becomes clearer.

No — and this may be the most important piece of advice on this page. If you anticipate needing Medicaid at any point in the foreseeable future, the time to see an elder law attorney is now — not when a nursing home need has already arisen.

Many of the most effective Medicaid planning strategies — including certain asset transfers and irrevocable trusts — must be implemented well before the five-year look-back period begins to have full effect. Once someone is already in a nursing home and spending down assets rapidly, the options available to protect the estate are significantly more limited.

Early planning allows your attorney to evaluate your full situation, identify the strategies available to you, implement those strategies in a way that complies with Medicaid rules, and give your plan time to take effect before you need to apply. Waiting until a crisis occurs often means leaving money on the table — or worse, facing Medicaid penalties for transfers that were made without proper legal advice.

Our DeKalb, Illinois elder law attorneys at Krupp & Krupp LLP are ready to help you evaluate your situation and start planning. Call (815) 758-5444 to schedule a consultation.