The Illinois Medical Assistance Program (“Medicaid”) is the health care program for individuals who do not have another form of insurance or whose insurance does not cover what they need. Medicaid covers medical costs that include doctor visits, prescriptions, and medical equipment. Medicaid also covers the costs of long-term care for many Illinois residents, including, but not limited to services in the home and long-term care facilities. The State of Illinois has an obligation to recover the amount of assistance paid out for long-term care programs through a Medicaid Estate Recovery Program.
What is the Medicaid estate recovery program in Illinois?
There are 2 ways that Medicaid recovers from the estate of a deceased recipient: (1) the deceased recipient’s probate estate, or (2) real property liens.
What is a Medicaid claim against a probate estate in Illinois?
Medicaid estate recovery does not apply to all property that a deceased recipient owned. The State of Illinois may file a claim against the probate estate of a deceased recipient for the value of medical assistance provided to them: (1) after they reached age 55, or (2) for a recipient of any age who is an inpatient in a nursing facility, an intermediate care facility for persons with intellectual disabilities, or other medical institution. The amount of the claim is equal to the amount of assistance received by the deceased recipient.
When does Illinois Medicaid not enforce or pursue a claim against a probate estate in Illinois?
An estate claim cannot be enforced while the deceased Medicaid recipient’s spouse, child under the age of 21, or a blind or disabled adult child of any age survives. In addition, the State of Illinois will not ask for money back under the following circumstances:
- The value of the estate is $25,000 or less (pending Federal approval);
- The cost of selling the property is more than it is worth / recovery is not cost-effective; or
- An undue hardship will result to the estate’s heirs or beneficiaries in the deceased recipient’s Last Will and Testament.
When is an undue hardship waiver granted for Illinois Medicaid estate recovery?
The State of Illinois will not grant an undue hardship waiver unless the estate heirs or beneficiaries ask for it by submitting a hardship waiver application. The application must be returned within 60 days of the State’s issuance of a notice of intent to file a claim against a deceased recipient’s estate.
Criteria for a hardship waiver are as follows:
- The estate’s property has been the site of a family business for at least 12 months before the death of the recipient and is the heir or beneficiary’s primary income producing asset (50% or more of their livelihood) and recovery would result in the heir or beneficiary losing their primary source of income.
- Pursuing recovery would cause an heir or beneficiary of the estate to become or remain eligible for a public benefit program, such as SSI or Food Stamps.
- The heir or beneficiary of the estate would be able to discontinue public and/or medical assistance if the State of Illinois did not recover the claim.
The State of Illinois is also empowered to develop additional hardship waiver standards. Data shows that only a limited number of hardship waivers are submitted each year.
What are Medicaid liens against real property in Illinois?
Effective June 2, 2022, new liens on real property are now restricted. Liens filed prior to June 2, 2022 will still be pursued.
Prior to June 2, 2022, liens were filed on real property for those recipients who received medical assistance, and resided for at least 120 consecutive calendar days in a long-term care facility. Liens were also filed on real property for recipients who received certain cash assistance during their lifetime. A lien was not filed against real property of a long-term care facility Medicaid resident when the property was occupied by the recipient’s spouse, child under the age of 21, blind or disabled adult child of any age, and in some cases, sibling(s).
When are Medicaid liens enforced against real property in Illinois?
Liens are enforced anytime there is a transfer of the real property, at the time of death of the owner, or in cases of fraud.
If you have questions about Medicaid Estate Recovery in Illinois, please contact us.