Section 120.385 Factors Affecting Eligibility for Long Term Care Services

Section 120

TITLE 89: SOCIAL SERVICES

CHAPTER I: DEPARTMENT OF HEALTHCARE AND FAMILY SERVICES

SUBCHAPTER b: ASSISTANCE PROGRAMS

PART 120 MEDICAL ASSISTANCE PROGRAMS

SECTION 120.385 FACTORS AFFECTING ELIGIBILITY FOR LONG TERM CARE SERVICES

Section 120.385  Factors

Affecting Eligibility for Long Term Care Services

a)         For

purposes of this Section, the terms "institutionalized persons" and

"long term care services" shall have the meanings described in

Section 120.388 of this Part.  The terms "institutionalized spouse"

and "community spouse" shall have the meanings described in Section

120.379(a) of this Part.

b)         Disclosure

of Annuity and Naming the State as Remainder Beneficiary.

1)         Effective

January 1, 2012, an application (or redetermination related to an application)

for long term care services shall include a disclosure by an institutionalized

person or his or her community spouse of any interest either or both may have

in any annuity or similar financial instrument purchased, regardless of whether

the annuity is irrevocable or is treated as an asset.  The application or

recertification form shall also include a statement that the State of Illinois

becomes a remainder beneficiary under such an annuity or similar financial

instrument to the extent that the State has provided medical assistance to the

institutionalized person.

2)         Failure

of an institutionalized person, his or her community spouse, or his or her

representative to disclose information or to name the State as a remainder beneficiary

as provided for in subsection (b)(1) of this Section, or to disclose sufficient

information regarding an annuity in order to establish eligibility for long

term care services, shall result in denial or termination of the eligibility

of an institutionalized person, his or her community spouse, or his or her

representative to disclose information or to name the State as a remainder beneficiary

as provided for in subsection (b)(1) of this Section, or to disclose sufficient

information regarding an annuity in order to establish eligibility for long

term care services, shall result in denial or termination of the eligibility.

Failure of an institutionalized person, his or her community spouse or his or

her representative to disclose the information provided for in subsection (b)(1)

of this Section, or to disclose sufficient information regarding an annuity in

order to establish eligibility for medical assistance, may also result in

denial or termination of eligibility for failure to cooperate under Section

120.308.

c)         Home Equity Interest.

1)         Effective

July 1, 2012, a person shall not be eligible for long term care services if the

person's equity interest in his or her homestead exceeds the minimum home

equity allowed and increased annually under federal law (42 USC 1396p(f)(1)(C)),

which, for calendar year 2012, was $525,000.  This amount shall be increased,

beginning with 2013, from year to year based on the percentage increase in the Consumer

Price Index for all urban consumers (all items:  United States city average),

rounded to the nearest $1000.  A person's equity interest in his or her homestead

shall be determined as follows:

A)        The

current market value (CMV) of the property is the going price for which it can

reasonably be expected to sell on the open market in the particular geographic

area involved

in the Consumer

Price Index for all urban consumers (all items:  United States city average),

rounded to the nearest $1000.  A person's equity interest in his or her homestead

shall be determined as follows:

A)        The

current market value (CMV) of the property is the going price for which it can

reasonably be expected to sell on the open market in the particular geographic

area involved.  The CMV of the property may be established by:

i)          an

appraisal report, no more than six months old at the time of the application

for long term care services, completed by an appraiser who is licensed or

otherwise meets the requirements under the Real Estate Appraiser Licensing Act

[225 ILCS 458]; or

ii)         a

county real estate assessor's current estimate of the market value or fair cash

value of the property used in determining the assessed value of a property; or

iii)        any

other reliable and verifiable indicia of the price that a property would bring

in a sale between a willing buyer and seller under arms-length conditions

unaffected by undue pressures;

B)        Equity

value (EV) is the CMV of the property minus any encumbrance on it;

C)        An

encumbrance is a legally binding debt against a specific property.  Such a debt

reduces the value of the encumbered property but does not necessarily prevent

the property owner from transferring ownership (selling) to a third party.

However, if the owner of encumbered property does sell, the creditor will

nearly always require debt satisfaction from the proceeds of sale.  Examples of

encumbrances include mortgages, reverse mortgages, home equity loans or other

debt that is secured by the property;

D)        If

property is held in any form of shared ownership (e.g., joint tenancy, tenancy

in common or other similar arrangement) only the fractional interest in the

property shall be considered in determining the person's equity in that

property

roceeds of sale.  Examples of

encumbrances include mortgages, reverse mortgages, home equity loans or other

debt that is secured by the property;

D)        If

property is held in any form of shared ownership (e.g., joint tenancy, tenancy

in common or other similar arrangement) only the fractional interest in the

property shall be considered in determining the person's equity in that

property.

2)         The

eligibility of a person for long term care services shall not be affected under

this subsection (c) if any of the following are lawfully residing in the person's

home:

A)        the person's spouse;

B)        the person's child who

is under age 21; or

C)        the

person's adult child who is blind (as described in Section 120.313 of this

Part) or disabled (as described in Section 120.314 of this Part).

3)         A

person whose eligibility for long term care services is affected under this

subsection (c) may request a hardship waiver.  The process and basis for

requesting such a waiver shall be the same as described in Section 120.388(r)

of this Part.  In determining whether a waiver should be granted, the

Department shall also take into account:

A)        the

amount of time the person has resided in and owned the home;

B)        whether

a substantial increase in property values in the home's geographic area

occurred after the person purchased the home;

C)        whether

the home comprises a substantial portion of the person's assets (as defined in

Section 120.388(d)); and

D)        whether

the person intends to return to the home after a period of institutionalization

or, if the person does not intend to return, whether the home can be sold after

being listed for sale or, if it cannot be sold, can produce income commensurate

with similar income producing properties in the geographic area.

4)         For

purposes of this Section the words, "homestead" and "home"

have the same meaning as the term "homestead" in Section

120.381(a)(1)(A) of this Part

lization

or, if the person does not intend to return, whether the home can be sold after

being listed for sale or, if it cannot be sold, can produce income commensurate

with similar income producing properties in the geographic area.

4)         For

purposes of this Section the words, "homestead" and "home"

have the same meaning as the term "homestead" in Section

120.381(a)(1)(A) of this Part.

d)        Disclosure

of Purchase of Promissory Notes, Loans and Mortgages and Assigning Interest to

the State.

1)         Effective

January 1, 2012, an application (or redetermination related to an application)

for long term care services shall include a disclosure by an institutionalized

person or his or her community spouse of any purchase of a promissory note,

loan or mortgage either or both may have made. The application or

recertification form shall also include a statement that the instrument shall

provide for the assignment to the State of Illinois, as of the date of death, of

up to the total amount of medical assistance paid on behalf of the

institutionalized person.

2)         Failure

of an institutionalized person, his or her community spouse, or his or her

representative to disclose information or to assign interest to the State as

provided for in subsection (d)(1) of this Section, or to disclose sufficient

information regarding a promissory note, loan or mortgage in order to establish

eligibility for long term care services, shall result in denial or termination

of the eligibility. Failure of an institutionalized person, his or her

community spouse, or his or her representative to disclose the information

provided for in subsection (d)(1) of this Section, or to disclose sufficient

information regarding a promissory note, loan or mortgage in order to establish

eligibility for medical assistance, may also result in denial or termination of

eligibility for failure to cooperate under Section 120.308.