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  1. HFS
  2. Public Involvement
  3. Long Term Care Changes
  4. Frequently Asked Questions

Frequently Asked Questions 

Select the Frequently Asked Question to view answer.
  1. What changes were made about annuities and promissory notes?
    To discourage individuals from sheltering resources in various financial instruments, individuals are required to disclose ownership in all annuities, promissory notes, loans and mortgages, including selling property contract-for-deed. To be eligible, the person must amend the financial instrument to make the State of Illinois the remainder beneficiary upon the person´s death. By federal law, the State of Illinois has the responsibility to recover payment for medical assistance after someone dies. Additionally, the terms of the annuities, promissory notes, loans, or mortgages are restricted: no balloon payments, no delay of payments, no cancelation of obligation upon death of persons, and they must be actuarially sound. These requirements exist so that the income from these instruments is available to the persons to pay for their care.
  2. Why were these changes made?
    Most of these changes were due to the federal Deficit Reduction Act (DRA) of 2005 and negotiations with advocates for seniors and persons with disabilities. Other changes were because of the Saving Medicaid and Resources Together (SMART) Act, Public Act 97-0689. Illinois was one of the last states to implement the requirements of the DRA so most of these rules are already in effect in other states. The changes affect individuals who need medical assistance from the state while in a nursing home, supported living facility (SLF), or who receive home based community supports under a waiver program, such as the Department on Aging’s Community Care Program.
  3. Why is the lookback period changing from 36 to 60 months?
    The change was made because of the DRA. Until January 1, 2012, the state only looked back 36 months (3 years) to see if someone had transferred resources to become eligible for long term care services from the state. Under the new rules, the lookback period increases to 60 months (5 years) and affects transfers made on or after January 1, 2007. Applicants may have to provide proof of all income and resources for the last 5 years, depending on their situation.
  4. What is a resource transfer?
    A resource transfer is when a person or the spouse gives away, trades, changes ownership, or sells real or personal property or fails to take ownership of property the person is entitled to (such as an inheritance). Property are all the things the person owns such as their home, vehicles, bank accounts, or investments.
  5. Are some transfers allowable?

    Transfers may be allowable if:

    • The person received fair market value for the property. The person received a reasonable amount based on the value of the resource at the time it was transferred,
    • The person transferred their home to the person’s spouse, child under 21, adult dependent child with disabilities, a son or daughter who lived with the person and cared for them for at least 2 years, or a brother or sister who is part owner of the home and lived there for at least a year
    • The person transferred other property to their spouse, to a child with disabilities or to a trust for that child. Or to a trust for the person’s own needs,
    • The transfer occurred due to bankruptcy, some other court action, mental incapacity or theft, or
    • The person provides evidence that the transfer was made for some reason other than to become eligible for medical assistance.
  6. Is there any change in how the penalty is applied?

    As a result of the DRA, any penalty period begins with the month of application or the month the person makes the transfer, whichever is later. Previously, any penalty began with the month the transfer was made.

    Example: In 2006, before the DRA changes, Mrs. M gave $15,000 to her children. This created a 3 month penalty since it would have covered her expenses in the long term care facility for 3 months if she were to pay for it herself. But since Mrs. M did not need care until 2011, any penalty had already expired. After the DRA changes, if Mrs. M had made the same transfer in 2008, she would have a penalty for approximately 3 months beginning with the month of application.

  7. Is there a change in how the penalty is calculated?
    Penalty periods are based on the value of the transfer that could have been used to pay for medical care. For example, if $20,000 was transferred and the facility charges $185 per day ($5,550 per month), the funds could have paid for 3.6 months (or 3 months and 18 days). Prior to the DRA, the penalty period would have only been for the 3 full months.
  8. How can I get a penalty removed?
    If you recover the value of the resources that were transferred, the penalty can be removed and you will have the resources to pay for your care.  If you feel the decision on the penalty was made in error, you can file an appeal. If you feel that the penalty period will cause an undue hardship, you can file for a hardship waiver of the penalty.
  9. What is a hardship waiver?
    A hardship waiver is when you provide proof that you will be deprived of food, clothing, shelter, essential medical care or other necessities of life if a penalty period is assigned to you and you are unable to pay for your care.  If a penalty period is established, you will receive information about how you can apply for a hardship waiver.
  10. Is there any change in eligibility for back months?
    State medical assistance under most programs allows eligibility to begin up to 3 months before the application month. To be eligible for these back months, the person must provide proof of their income and resources for each month.
  11. What are the eligibility guidelines when submitting an application?

    When a person applies for long term care (LTC) medical assistance, he or she (or his/her authorized representative) must provide information detailing his or her resources and income. If the person has a spouse living in the community, both spouses are required to cooperate in reporting resources. If either spouse refuses or fails to cooperate in providing information regarding the total value of resources owned by either spouse or both spouses, or refuses consent to verification by the state, the person is ineligible for medical assistance.

    After determining income eligibility the total value of resources owned by the LTC spouse, the community spouse, or jointly by both, the Community Spouse Resource Allowance (CSRA), up to $109,560 (see Community Spouse Resource Allowance), may be transferred to the community spouse.

    A deduction from income to meet a community spouse's needs is also allowed when the community spouse verifies monthly income and does not have enough income to meet his or her own needs. This is called the Community Spouse Maintenance Needs Allowance (CSMNA; see Community Spouse Maintenance Needs Allowance). The CSMNA is the monthly maintenance needs standard of $2,739 minus the community spouse's gross monthly income. This deduction is not mandatory and is only allowed to the extent the LTC spouse actually contributes income to the community spouse.

    After allowing the exemptions detailed above, the remaining resources and income, with the exception of the income standard, are considered available to pay for the care of the LTC spouse. The income standard is an amount the LTC spouse is permitted to keep for his or her personal use (see NH Standard/SLF Standard).

    • For a resident of a nursing home, the income standard is $30 per month.
    • For a resident of a supportive living facility (SLF), the standard is based on whether the resident shares a room. For an SLF resident who does not share a room, the standard is the SSI rate for a single person. For 2013, this amount is $710 per month. For a SLF resident who shares a room, the standard is 1/2 of the SSI rate for a couple. For 2013, this amount is $533 per month.

    When applying for LTC medical assistance, a person must also report all transfers of resources and income during the 60 months prior to application. The LTC spouse and the community spouse may transfer resources to each other in any amount but the rules and allowances for resources and income (described above) will be applied. All other transfers will be reviewed to determine if fair market value was received (see Allowable Transfers).Transfers made for the purpose of becoming eligible for medical assistance are not allowable.