Medicaid Long-Term Care Guide in Illinois

• Nearly any income from any source is counted towards the limit, including employment wages, alimony, pension payments, SSDI, SSI, IRA withdrawals, and stock dividends.
• Nationally, Holocaust restitution payments are not counted as income.
• Unlike the majority of states, Illinois DOES count the VA Aid & Attendance Allowance as income.
• When only one spouse applies for Institutional Medicaid or a Medicaid Waiver, only the applicant's income is counted.
• The non-applicant spouse may receive a Community Spouse Maintenance Needs Allowance (CSMNA) — Illinois's term for the Spousal Income Allowance.
• In 2026, the CSMNA is $4,066.50 / month. If a non-applicant spouse's income is under this amount, income can be transferred from the applicant spouse.
• For Regular Medicaid, both spouses' income is counted. There is no CSMNA for a non-applicant spouse.

Illinois is one of the few states that counts VA Aid & Attendance as income for Medicaid eligibility purposes.

• Countable assets include cash, stocks, bonds, investments, cryptocurrency, bank accounts (money market, savings, checking), and real estate in which one does not reside.
• In Illinois, IRAs are also counted as assets.
• Non-countable (exempt) assets include personal belongings, household furnishings, an automobile, and generally one's primary home.
• Irrevocable prepaid funeral burial contracts up to $8,434 are exempt. If funded by a life insurance policy, there is no limit.
• Illinois has a significantly higher asset limit of $17,500 compared to the $2,000 limit in most states.
• All assets of a married couple are considered jointly owned regardless of the Medicaid program.
• The Community Spouse Resource Allowance (CSRA) allows the non-applicant spouse to retain up to $143,172 of the couple's assets (2026).
• There is no CSRA for Regular Medicaid.

• The primary home is automatically exempt if the applicant's spouse, child under 21, or permanently blind or disabled child (of any age) lives in it.
• If this is not the case, there is a home equity interest limit of $730,000 (in 2026).
• Home equity is the value of the home minus any outstanding debt against it. Equity interest is the amount of equity owned by the applicant.
• If neither the applicant nor qualifying family live in the home, the applicant must have Intent to Return.
• There is no home equity interest limit for Regular Medicaid.
• The home is NOT exempt from Medicaid's Estate Recovery Program. After a beneficiary's death, the IL Medicaid agency attempts reimbursement of care costs through the deceased's estate.

• Illinois has a 60-month Look-Back Period for Nursing Home Medicaid and Medicaid Waiver applications that immediately precedes the application date.
• During the look-back, Medicaid checks to ensure no assets were gifted or sold for under fair market value.
• Violations result in a Penalty Period of Medicaid ineligibility.
• The Look-Back Period does NOT apply to Regular Medicaid.
• The U.S. Federal Gift Tax Rule ($19,000 per recipient in 2026) does not extend to Medicaid eligibility — gifting under this rule still violates the Look-Back Period.

• MMMNA: $4,066.50 · CSRA: $143,172 · CSRA Min: $32,532
• When only one spouse applies for Institutional Medicaid or a Medicaid Waiver, only the applicant's income is counted.
• Illinois calls the Spousal Income Allowance the Community Spouse Maintenance Needs Allowance (CSMNA).
• In 2026, the CSMNA is $4,066.50 / month — set at the federal maximum. If the non-applicant's income is under this amount, income can be transferred from the applicant spouse.
• The CSRA allows the non-applicant spouse to retain up to $143,172 of the couple's assets (2026).
• For Regular Medicaid, both spouses' income is counted and there is no CSMNA or CSRA.

• Medically Needy Pathway — Illinois has a spenddown program for seniors over the income limit. One can become income-eligible by spending income on medical expenses (medical care, nursing home services, in-home personal care, Medicare premiums, prescription drugs). The MNIL is $1,304 / month for individuals and $1,762 / month for couples (eff. April 2025 – March 2026). Illinois also offers a 'pay-in spenddown' option, allowing one to pay their monthly spenddown directly to the IL Department of Human Services. The medically needy asset limit is $17,500.
• Asset Spend-Down — Spend excess assets on non-countable items such as home modifications (wheelchair ramps, stair lifts), prepaying funeral/burial expenses, and paying off debt. Keep documentation as proof the Look-Back Rule was not violated.
• Medicaid Planning — Work with a Medicaid Planning Professional to employ strategies to become eligible and protect your home from Medicaid's Estate Recovery Program.

Illinois does not use Qualified Income Trusts (Miller Trusts). The Medically Needy / spenddown pathway is used for persons over the income limit. Illinois also offers a unique 'pay-in spenddown' option.