Illinois Medicaid Planning

The Medicaid 5 Year Look Back Period Explained | Illinois Medicaid Planning

Article written by Illinois & Iowa Attorney Kevin O'Flaherty
Updated on
November 1, 2019

Medicaid is a government program intended to pay for long-term care once an individual's assets have been depleted.  Elderly individuals who anticipate the need for institutional or in-home long term care may seek to transfer their assets to loved ones prior to applying to Medicaid in order to qualify for Medicaid and avoid having those assets depleted in the course of their long-term care.  

‍However, there is a five-year "look back" period that allows the state to review transfers made 5 years prior to the date that you apply for Medicaid benefits.  If an improper transfer of assets was made during this period, a "penalty period" is imposed during which your eligibility for Medicaid will be delayed.  The length of the "penalty period" depends on the amount of the transfer.  Certain types of transfers are exempt from the "look back" period, and will not delay your eligibility from Medicaid.

‍If you fail to disclose non-exempt transfers when you apply for Medicaid, you may be subject to criminal and civil penalties for Medicaid fraud.  In addition, the person to whom you transferred the assets may be required to pay a penalty equal to the amount of Medicaid benefits received by the transferor, not to exceed the amount of the transfer.  

‍If you foresee the need for long-term care, meeting with an attorney for Medicaid Planning may allow you to transfer assets to your loved ones without incurring a "penalty period."  This planning can be effective within the 5 year "look back" period.  However, it is advisable to begin your planning at least 5 years prior to the need for long-term care, because your options will be significantly limited once that 5 year window begins.  

‍If you believe that you have made or received a fraudulent transfer, you should consult with an attorney immediately in order to help you "cure" or undo the transfer in order to avoid civil and criminal penalties.   

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