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Moore v. State

Court of Appeals of Illinois, Fourth District

April 11, 2017

CHRISTINE P. MOORE, as Executrix of the Estate of Elda Buckley, Deceased, Plaintiff-Appellant,
v.
THE STATE OF ILLINOIS, THE DEPARTMENT OF HUMAN SERVICES and MICHELLE R.B. SADDLER, SECRETARY OF HUMAN SERVICES, and THE DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES and JULIE HAMOS, DIRECTOR OF HEALTHCARE AND FAMILY SERVICES, Defendant-Appellee.

         Appeal from Circuit Court of Sangamon County No. 13MR802. Honorable Brian T. Otwell, Judge Presiding.

          JUSTICE HOLDER WHITE delivered the judgment of the court, with opinion. Justices Steigmann and Pope concurred in the judgment and opinion.

          OPINION

          HOLDER WHITE, JUSTICE

         ¶ 1 In October 2011, Elda Buckley, now deceased, purchased an insurance policy that contained a rider payable to Christine P. Moore, the executrix of Buckley's estate, upon Buckley's death. The same day, Buckley applied for Medicaid benefits under the Illinois Public Aid Code (Code) (305 ILCS 5/1-1 to 15-11 (West 2010)), which contains a provision prohibiting the transfer of certain assets for less than fair market value. Following a hearing, defendant, the State of Illinois, acting through the Department of Human Services (Human Services) and its secretary, Michelle R.B. Saddler, and the Department of Healthcare and Family Services and its director, Julie Hamos (collectively, Departments), found Buckley's insurance policy was purchased for less than fair market value and therefore constituted a nonallowable transfer of assets subject to penalty. The current secretaries of the Departments, James T. Dimas and Felicia F. Norwood, respectively, have been substituted for Saddler and Hamos. During the pendency of the administrative-review proceedings, Moore also passed away, and Kevin McDermott, the Sangamon County Public Administrator (Public Administrator), was substituted for Moore pursuant to letters of office. In April 2015, the circuit court affirmed the Departments' findings.

         ¶ 2 The Public Administrator appeals, asserting the Departments erred in finding the purchase of the insurance policy was a nonallowable transfer subject to penalty under the Code. We affirm.

         ¶ 3 I. BACKGROUND

         ¶ 4 In October 2011, Buckley resided in a long-term care facility at a monthly rate of $5, 400. At that time, Moore filed an application for medical assistance (Medicaid) on Buckley's behalf. On the same date, Moore, on Buckley's behalf and using Buckley's funds, purchased a single-premium whole life insurance policy for $15, 000. The policy consisted of a base policy purchased for $940.90 and a recurring death-benefit rider purchased for $14, 059.10, and Moore was the beneficiary under the policy. In its initial year, the cash value of the base policy was $767.05, and the rider had a cash value of $0.

         ¶5 In April 2012, Buckley received form HFS 458LTC from the local Human Services' office, advising her that her Medicaid application had been approved but included a penalty period based on Buckley's purchase of the insurance policy, which it considered to be a nonallowable asset transfer.

         ¶ 6 The following month, Moore appealed the imposition of the penalty period to the Human Services' Bureau of Assistance Hearings, arguing the local office erred by determining the purchase of Buckley's single-premium whole life insurance policy was a nonallowable asset transfer. Rather, Moore contended the policy was purchased for fair market value and therefore constituted an allowable transfer. After considering the evidence, the Departments affirmed the penalty period after finding Buckley obtained the insurance policy the day she filed for Medicaid, which made the policy subject to review. The Departments determined, pursuant to section 120.387 of Title 89 of the Illinois Administrative Code (Administrative Code) (89 Ill. Adm. Code 120.387, amended at 35 Ill. Reg. 18645 (eff Jan. 1, 2012)), that the insurance policy was not purchased for fair market value because the $14, 000 rider represented a vehicle by which Buckley received nothing in return. In August 2013, the Departments entered a final administrative decision affirming the findings of the hearing officers.

         ¶ 7 In October 2013, Moore filed an amended complaint for administrative review in the circuit court of Sangamon County. The complaint alleged the Departments erred by arbitrarily and capriciously finding the insurance policy was a nonallowable transfer of an asset for less than fair market value. In April 2016, the court entered an order affirming the Departments' decision.

         ¶ 8 This appeal followed.

         ¶ 9 II. ANALYSIS

         ¶ 10 On appeal, the Public Administrator argues the Departments erred by finding the insurance policy constituted a nonallowable transfer. ...


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