CHRISTINE P. MOORE, as Executrix of the Estate of Elda Buckley, Deceased, Plaintiff-Appellant,
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.
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.
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
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.
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
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. ...