Illinois Attempts to Make Drastic Cuts to Medicaid

May 16, 2012 § Leave a comment

Illinois lawmakers are currently in the process of putting together budget bill for the State of Illinois.  As part of this, the Illinois Department of Human Services is negotiating with lawmakers to make an end-run around the Administrative process by instituting draconian cuts to the Medicaid program through the budget process.  While cuts and revenue enhancements are needed everywhere in the Illinois budget, some of the proposed changes by DHS are truly draconian and will adversely effect Seniors around the State.

Most importantly, Congress amended the Medicaid rules in 1993 to account for the situation where an institutionalized individual (someone in a nursing home) still has a spouse at home.  In this situation, the spouse at home still needs to pay bills and support themselves.  Prior to 1993, Medicaid rules required the spouse to become impoverished, as well as the institutionalized individual, before the couple could receive Medicaid assistance.  The 1993 rule, called the Spousal Impoverishment Standard (in order to prevent spousal impoverishment―the name is confusing), provided that when a married person needs Medicaid, their spouse can keep a certain amount of assets, plus their home and personal belongings and the institutionalized spouse can get Medicaid to pay for their nursing home care.  This amount is called the Community Spouse Resource Allowance.  The Community Spouse Resource Allowance in Illinois has been $113,640.  DHS proposes to change that amount $22,728!  This change will radically effect Seniors will ill spouses who will need nursing home care!

An additional beneficial change in the 1993 law was that a spouse in a nursing home could transfer some of their income to their spouse at home, up to a certain amount, before having to turn their income over to the nursing home.  This figure in Illinois has been $2,841 per month – meaning, the income of the institutionalized spouse can be transferred to the community spouse until his or her income reaches $2,841 in total.  So, a community spouse whose monthly income is $1,000 can have $1,841 transferred to him or her from their institutionalized spouse’s income.  The remainder of the spouse’s income then goes to the facility.  Illinois DHS proposes to change this from $2,841 to $1,838.75.  This means the Community Spouse will have almost $1,000 less per month to meet their basic living expenses when their spouse goes in the nursing home…..thereby depleting their assets even faster, if they have more than $22,728 in assets!  If the couple has less in assets, this rule could force Community Spouses to sell their homes to pay for their spouse’s care.  This is exactly the type of situation the 1993 law was enact to prevent.

DHS also proposes some other changes, which are likely needed and not as objectionable as the above.  For instance, they propose to lower the amount of equity an applicant can have in their home.  Currently, the figure is $750,000; DHS proposes to lower that to $500,000.

Please weigh in on this issue with your State legislator.  Tell them not to destroy the Spousal Impoverishment protections for Medicaid, and not to let DHS do an end-run around the Administrative process by creating rules during the budget-making process.  You can also call the AARP Hotline for action at 888-616-3322.
The Law Office of Dawn M. Weekly, PC is located in Sandwich, Illinois and focuses on elder law and Life Care Planning for clients.  Our office may be reached by calling 815-570-2334.

  Every day of every week, Weekly Law is there for you.

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