Moore v. State
2017 IL App (4th) 160414
| Ill. App. Ct. | 2017Background
- In October 2011, Elda Buckley, a long-term care resident, applied for Medicaid and the same day used $15,000 of her funds to buy a single-premium whole life insurance policy naming Christine Moore (her friend/executrix) beneficiary of death proceeds and a $14,059.10 death-benefit rider.
- The base policy had modest cash value; the large rider had no cash value in year one and conferred no tangible benefit to Buckley while she was alive.
- The Illinois Department of Human Services/Department of Healthcare and Family Services determined the purchase was a transfer for less than fair market value and imposed a Medicaid penalty period; agencies relied on 89 Ill. Adm. Code 120.388/120.387 definitions and factors.
- Moore appealed administratively; departments affirmed. Moore (and later Buckley) died; Kevin McDermott, Sangamon County Public Administrator, pursued judicial review.
- The Sangamon County circuit court affirmed the administrative decision; the Fourth District appellate court reviewed the agency decision under the clearly erroneous standard and affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Buckley’s purchase was a transfer for less than fair market value under Medicaid law | Payment of $15,000 for a $15,000 payout (policy + rider) equals fair market value; arm’s-length transaction | Rider had no intrinsic/cash value to Buckley; she received no tangible benefit and purpose was to shelter assets for beneficiary; agency reasonably found less than fair market value | Held: transfer was for less than fair market value; agency decision affirmed |
Key Cases Cited
- Gillmore v. Illinois Dept. of Human Services, 354 Ill. App. 3d 497 (appellate decision) (purchase of annuity structured to bypass Medicaid limits not for fair market value)
- Gillmore v. Illinois Dept. of Human Services, 218 Ill. 2d 302 (Ill.) (supreme court affirming that certain annuities defeat Medicaid purpose and are not fair market transactions)
- Outcom, Inc. v. Illinois Dept. of Transportation, 233 Ill. 2d 324 (Ill.) (standard that reviewing court reviews the agency decision)
- Vincent v. Department of Human Services, 392 Ill. App. 3d 88 (Ill. App.) (Medicaid applicants expected to deplete assets before receiving benefits)
- McDonald v. Department of Human Services, 406 Ill. App. 3d 792 (Ill. App.) (preserving public medical resources justifies transfer scrutiny)