Disclaimer: This article provides general information about Illinois Medicaid estate recovery. It does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation.
Detailed Answer
When an Illinois resident dies after receiving Medicaid benefits, the Illinois Department of Healthcare and Family Services (HFS) may seek to recover costs from the decedent’s estate, including inherited property. Below are the typical steps involved in a Medicaid estate recovery claim in Illinois:
- Determine Recovery Eligibility
Under federal law (42 C.F.R. §433.36) and Illinois policy, HFS must attempt recovery for Medicaid costs paid on behalf of individuals age 55 or older, or those who received long-term care services. HFS reviews its records to confirm benefit payments. - Identify the Estate and Personal Representative
HFS locates the decedent’s probate estate and identifies any appointed personal representative or executor. If no probate is open, HFS may notify potential heirs. - File a Proof of Claim in Probate
If the estate enters probate, HFS prepares and files a “Proof of Claim” in the probate court. Under the Illinois Probate Act (755 ILCS 5/2-6), creditors generally have six months from the date letters of office are issued to file claims. (See https://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=2106&ChapterID=59&SectionID=125592 ) - Initiate Independent Action if No Probate
When no probate is opened, federal regulations permit HFS to initiate a civil action or file a claim against real property within three years of the beneficiary’s death (42 C.F.R. §433.36(b)(2): https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-433/section-433.36 ). - Valuate and Prioritize Claims
During probate administration, the court or personal representative values estate assets. Illinois law prioritizes certain expenses—funeral, administration, support—before general creditors like HFS (755 ILCS 5/6-4). After these, the Medicaid claim may be paid from remaining assets. - Resolve or Contest the Claim
Heirs or personal representatives can review HFS’s claim, negotiate a settlement, or file objections in court. Common disputes involve the value of property or whether assets are exempt (e.g., certain family homes). A hearing may resolve contested issues. - Collect and Distribute Proceeds
Once approved, the court orders payment to HFS from estate proceeds or directs sale of non-exempt property. Illinois requires HFS to collect only the amount spent on benefits, not penalties or interest. Any remaining assets then pass to heirs per the will or Illinois intestacy rules. - Request Hardship Waiver
Under federal law (Social Security Act §1917(b)(1), (g): https://www.ssa.gov/OP_Home/ssact/title19/1917.htm ), HFS may waive recovery if it causes undue hardship to heirs or dependents. Requests must be submitted directly to HFS with supporting documentation.
Key Illinois references:
- Illinois Probate Act: 755 ILCS 5 (https://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=2106&ChapterID=59)
- HFS Medicaid Estate Recovery Program: https://www2.illinois.gov/hfs/Pages/default.aspx
Helpful Hints
- Open probate promptly to avoid independent recovery actions by HFS.
- Maintain detailed records of Medicaid benefits and estate assets.
- Review potential exemptions (e.g., homestead allowances) under Illinois law.
- Consult an attorney before filing objections or negotiating with HFS.
- Consider applying for an undue hardship waiver early in the probate process.
- Track critical deadlines: six months for probate claims, three years for civil actions.