IN THE APPELLATE COURT
| MARTHA GILLMORE, Executrix of the Estate of MARY A. FILLBRIGHT, Deceased, Plaintiff-Appellant, v. THE ILLINOIS DEPARTMENT OF HUMAN SERVICES, Acting Through Linda Renee Baker, Its Secretary, and Jackie Garner, Director, Illinois Department of Public Aid, Defendant-Appellee. | ) ) ) ) ) ) ) ) ) ) | Appeal from Circuit Court of Menard County No. 02MR12
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MODIFIED UPON DENIAL OF REHEARING
JUSTICE APPLETON delivered the opinion of the court:
Plaintiff, Martha Gillmore, as the executrix of Mary A.Fillbright's estate, appeals from the circuit court's orderaffirming the administrative decision of the Illinois Departmentof Human Services (Department). The Department awarded Fillbright medical assistance beginning January 1, 2002. However,the award was subject to a penalty period from April 2002 throughJanuary 2004 because Fillbright's purchase of an annuity onJanuary 31, 2002, was considered a nonallowable transfer ofassets. Plaintiff appealed to the circuit court, arguing theDepartment erred in implementing the penalty because the purchaseof the annuity conformed to federal law. We affirm.
I. BACKGROUND
On January 31, 2002, Fillbright, age 78, applied formedical assistance under the Medical Assistance--No Grant (MANG)program administered by the Department. Fillbright was seekingfinancial assistance for her residential long-term care. Thesame day she applied for MANG, Fillbright purchased a single-premium annuity in the amount of $73,713. The annuity was basedon her life expectancy of 116 months with payments to Fillbrightfor 115 months in the amount of $188.94 and a final payment inmonth 116 of $72,741.94. Fillbright's life expectancy wasderived from federally approved life-expectancy tables.
On March 11, 2002, the Department's local officedetermined that Fillbright's purchase of the annuity constituteda nonallowable transfer of assets subject to an ineligibilityperiod. Her benefits, which had been approved effective January1, 2002, were subject to a penalty where no benefits would bepaid between April 2002 and January 2004.
Fillbright appealed the office's decision. On June 25,2002, the Department conducted an administrative hearing before ahearing officer. On July 28, 2002, the Department, through itssecretary, Linda Renee Baker, considered and adopted the hearingofficer's findings of fact and affirmed the office's decision. In evaluating Fillbright's appeal, the Department questionedwhether Fillbright received fair-market value on her purchase ofthe annuity. The Department determined that she did not receivefair-market value since she was not being paid in "approximatelyequal periodic payments" over the term of the annuity in accordance with section 120.387(e)(13) of Title 89 of the IllinoisAdministrative Code (89 Ill. Adm. Code