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09/20/89 Christopher Hession, v. the Illinois Department of

September 20, 1989

CHRISTOPHER HESSION, APPELLEE

v.

THE ILLINOIS DEPARTMENT OF PUBLIC AID ET AL., APPELLANTS



SUPREME COURT OF ILLINOIS

544 N.E.2d 751, 129 Ill. 2d 535, 136 Ill. Dec. 65 1989.IL.1456

Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Arthur L. Dunne, Judge, presiding.

APPELLATE Judges:

JUSTICE MILLER delivered the opinion of the court. JUSTICE CALVO took no part in the consideration or decision of this case.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MILLER

The plaintiff, Christopher Hession, through Little Company of Mary Hospital, filed a complaint for administrative review in the circuit court of Cook County. Hession sought judicial review of a final decision of the Illinois Department of Public Aid (Department) denying his application for medical assistance for the months of October, November and December 1982. The circuit court affirmed in part and reversed in part the Department's decision. The court agreed with the Department that Hession was ineligible for assistance for the month of October but concluded that he was entitled to assistance for the months of November and December. Hession appealed to the appellate court that portion of the circuit court's judgment finding him ineligible for medical assistance for October 1982. The appellate court reversed the trial court's judgment, concluding that Hession was entitled to medical assistance for October 1982 in addition to that provided for November and December. (163 Ill. App. 3d 553.) We allowed the Department's petition for leave to appeal from the appellate court's judgment pursuant to Supreme Court Rule 315 (107 Ill. 2d R. 315).

Christopher Hession entered Little Company of Mary Hospital on October 7, 1982, and remained there through December 5, 1982. During the course of his hospitalization, Hession incurred medical expenses totaling approximately $35,000. On November 8, 1982, a month after his admission, Hession, with the hospital's assistance, filed with the Department an application for medical assistance under the Medicaid program.

After receiving Hession's application, the Department requested a telephone interview to verify the information provided on the application. Hession's former wife telephoned the Department on November 19, 1982, and spoke with the caseworker handling Hession's application. Mrs. Hession explained that her former spouse lived alone, had no life or medical insurance, had been unemployed since 1980 and received no income other than that derived from occasional odd jobs. Pursuant to the caseworker's request, a copy of Hession's savings account passbook was forwarded to the Department. The passbook was received by the Department on November 24, 1982, and showed a balance of $1,927.01. On December 8, 1982, the Department mailed Hession a notice explaining that it had denied his application because the reported value of his savings account exceeded the agency's $1,500 "asset disregard." By agency standards, the first $1,500 in assets of a single person residing alone must be disregarded in assessing that person's eligibility for medical assistance.

On December 16, 1982, Little Company of Mary Hospital, on Hession's behalf, filed with the Department a notice appealing the denial of Hession's application for medical assistance. Following a hearing, the Department issued its final decision on January 13, 1983. The Department concluded that, based on departmental regulations, the caseworker had correctly denied Hession's application because the balance in Hession's savings account exceeded the asset disregard of $1,500 on the date his eligibility for assistance was determined.

Hession then filed a complaint for administrative review in the circuit court of Cook County on February 16, 1983. Hession moved for judgment on the pleadings, arguing, among other things, that the Department's policy which found him ineligible for medical assistance by considering his excess assets without reference to his incurred medical expenses was unreasonable. Additionally, Hession pointed out that the Department had an asset reduction policy which permitted individuals to reduce their assets below the asset disregard by paying medical bills or making other allowable transfers after applying for benefits but prior to the Department's Disposition of their applications and in that way to qualify for medical assistance. Citing Brengola-Sorrentino v. Department of Public Aid (1984), 129 Ill. App. 3d 566, Hession contended that he had a due process right to be informed of the Department's asset reduction policy prior to a determination of his eligibility for assistance.

On February 20, 1986, the court entered an order affirming in part and reversing in part the Department's final decision denying Hession's application for medical assistance. The court concluded that Hession was entitled to assistance for the months of November and December 1982 because the Department had failed to advise Hession that, in order to qualify for assistance, he could have reduced his assets below the asset disregard prior to the Disposition of his application. However, the court determined that Hession was ineligible for assistance for October 1982, noting that, even if the Department had informed Hession of its asset reduction policy when he applied in November 1982, Hession could not have retroactively reduced his assets in November 1982 to bring them within allowable limits for October 1982. The circuit court did not believe that the Department was required to consider the medical expenses incurred by Hession during the month of October in determining his eligibility for assistance for that month.

Hession appealed to the appellate court the circuit court's partial affirmance of the Department's decision finding him ineligible for assistance for October 1982. The Department did not cross-appeal that portion of the court's judgment finding Hession entitled to medical benefits for November and December 1982 because of the Department's failure to advise Hession of its asset reduction policy.

In the appellate court, Hession did not argue that he was entitled to medical assistance for the month of October 1982 because he was not told by the Department of its asset reduction policy. Instead, Hession renewed his argument that the Department was required by the Medicaid Act (42 U.S.C. § 1396 et seq. (1982)), by the Illinois Public Aid Code (see Ill. Rev. Stat. 1987, ch. 23, par. 5-1 et seq.), and by the equal protection clauses of the United States and Illinois Constitutions (U.S. Const., amend. XIV; Ill. Const. 1970, art. I, § 2) to consider his medical expenses as well as his assets in determining his eligibility for Medicaid assistance for that month. The appellate court agreed with Hession that the Illinois Public Aid Code requires the Department to utilize a "resource spend down" methodology in determining an applicant's eligibility. (163 Ill. App. 3d at 559-60.) Under this methodology, applicants who incur medical expenses in excess of their assets above the asset disregard are eligible to receive Medicaid benefits; the amount of their benefit, however, is reduced by the amount of their excess assets. Thus, the appellate court concluded that Hession was entitled to medical assistance for the month of October 1982 to the extent his incurred medical expenses exceeded the approximately $400 in assets that he possessed above the $1,500 limitation. The Department petitioned this court for leave to appeal the appellate court's judgment, and we allowed the petition.

The single issue presented in this appeal is whether the Department must consider the amount of an applicant's incurred medical expenses as well as the amount of his or her assets when determining eligibility for medical assistance under the Medicaid program. We conclude ...


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