Overview of the Medicare-Medicaid Alignment Program
Illinois’ Medicare-Medicaid Alignment Initiative (MMAI) demonstration program provides a variety of long-term services and supports for elderly and disabled adults who are “dual eligible”. This is the term used for persons who are eligible for both Medicaid and Medicare. While nursing home care is an available benefit via MMAI, home and community based services (HCBS) are also available to delay and prevent unnecessary nursing home admissions. HCBS allow program participants to continue to live at home, the home of a relative, or a supportive living facility, which is similar to an assisted living residence. It is likely that an adult foster care home is also an acceptable living situation. Intended to promote independence, in-home personal care assistance, homemaker services, personal emergency response systems, and home modifications are available benefits. Adult day care is also available for those who require daytime supervision and assistance.
This managed care demonstration program combines the delivery of medical, behavioral health, and long-term care Medicaid benefits and Medicare benefits, including prescription drug coverage, via one health plan. Beneficiaries of the MMAI Demonstration Program receive their benefits via a single Medicaid plan provided by a managed care organization (MCO). A MCO is essentially a private healthcare company. The MCO has a network of care providers and program participants receive services via these providers. Within most counties of Illinois, there are several managed care plans from which to choose. While many long-term care Medicaid programs have a participant-directed option which allows beneficiaries to hire the caregiver of their choosing, MMAI does not.
The Medicare-Medicaid Alignment Initiative is a mandatory Medicaid program for persons who require long-term care and meet the eligibility criteria. There is one exception; eligible persons can choose to enroll in the Managed Long Term Services and Supports (MLTSS) Program / HealthChoice Illinois instead. However, with MMAI, Medicare, prescription drug, and Medicaid benefits are received via one plan, and with MLTSS, only Medicaid benefits are received. Medicare benefits continue to be received via Medicare. Both MLTSS and MMAI are entitlement programs, which means meeting eligibility requirements equates to immediate receipt of program benefits. Put differently, the programs do not limit the number of participant enrollment slots and there is never a waitlist for program participation.
MMAI is a Medicaid demonstration program. Initially, it was only available in the Greater Chicago and Central IL regions, but it became available statewide on July 1, 2021.
Medicaid pays doctors, hospitals, and other providers in one of two ways, either “Fee-For Service” or “Managed Care”. Under Fee-For Service, Medicaid pays providers directly for each service they provide. Beneficiaries can receive services from any Medicaid-certified provider. Under Managed Care, Medicaid contracts with a Managed Care Organization (MCO). Medicaid pays the MCO a set amount for each beneficiary, rather than for each service provided. The MCO has a network of doctors, hospitals, and other providers and the MCO pays them. Beneficiaries must use providers within the network.
Benefits of the Medicare-Medicaid Alignment Program
Follows is a list of potential benefits available via the Medicare-Medicaid Alignment Initiative. An individual care plan determines which long-term care services and supports a program participant receives. Meeting program requirements does not guarantee receipt of all listed benefits.
– 24/7 Nurse Line
– Adult Day Care / Adult Day Service – transportation to / from the facility may be provided
– Behavioral Health Services
– Care Coordination
– Dental Services
– Durable Medical Equipment
– Hearing Services
– Home / Vehicle Modifications
– Home Health Care
– Homemaker Services
– Hospice Care
– Hospitalization
– Laboratory Tests / X-Rays
– Medical Supplies
– Mental Health Services
– Nursing Home Care
– Personal Care Assistance
– Personal Emergency Response Systems – includes installation and monthly service fees
– Physician Visits
– Prescription Medications
– Transportation – non-emergency medical
– Vision Services
Eligibility Requirements for Medicare-Medicaid Alignment Program
The Medicare-Medicaid Alignment Initiative is for Illinois residents (21+ years old) who are disabled or elderly and enrolled in Medicaid and Medicare (Parts A, B and D). Additional eligibility criteria are as follows. Alternatively, one can take a quick, non-binding IL Medicaid Eligibility Test here.
Financial Criteria: Income, Assets & Home Ownership
Income
The applicant income limit is equivalent to 100% of the Federal Poverty Level (FPL), which increases annually in January. Specific to Illinois Medicaid, the program income limits increase in April. Effective 4/1/24 – 3/31/25, an individual applicant can have a monthly income up to $1,255. For a married couple, with both spouses as applicants, the monthly income limit for the couple is $1,703. When only one spouse is an applicant, the income of the non-applicant spouse is not counted towards the income eligibility of their spouse. Only the applicant spouse’s income is considered, which is limited to $1,255 / month. Furthermore, monthly income from the applicant spouse can be transferred to the non-applicant spouse as a Spousal Income Allowance, also called a Monthly Maintenance Needs Allowance (MMNA).
In IL, in 2024, the MMNA is $3,853.50 / month. If a non-applicant spouse’s monthly income falls under this amount, income can be transferred to them from their applicant spouse to bring their income up to $3,853.50. Non-applicant spouses who have their own income equal to or greater than $3,853.50 / month are not entitled to a Spousal Income Allowance.
Assets
In 2024, the asset limit is $17,500 for a single applicant, as well as for married couples with both spouses as applicants. When only one spouse is an applicant, the assets of both the applicant and non-applicant spouse are still limited. This is because Medicaid considers the assets of a married couple to be jointly owned. In this case, the applicant spouse can retain up to $17,500 in assets and the non-applicant spouse can keep up to $129,084. This larger allocation of assets to the non-applicant spouse is called a Community Spouse Resource Allowance.
Some assets are not counted towards Medicaid’s asset limit. These generally include an applicant’s primary home, household furnishings and appliances, personal effects, and a vehicle.
Assets should not be given away or sold under fair market value within 60-months of long-term care Medicaid application. This is because Medicaid has a Look-Back Rule and violating it results in a Penalty Period of Medicaid ineligibility.
Home Ownership
The home is often the highest valued asset a Medicaid applicant owns, and many persons worry that Medicaid will take it. For eligibility purposes, Illinois Medicaid considers the home exempt (non-countable) in the following circumstances.
– The applicant lives in the home or has “Intent” to Return home, and in 2024, their home equity interest is no more than $713,000. Home equity is the current value of the home minus any outstanding mortgage. Equity interest is the portion of the home’s equity value that is owned by the applicant.
– The applicant has a spouse that lives in the home.
– The applicant has a disabled or blind adult child that lives in the home.
– The applicant has a child under 21 years old that lives in the home.
While the home is likely exempt while one is receiving Medicaid benefits, it may not be safe from Medicaid’s Estate Recovery Program. Learn more about the potential of Medicaid taking the home here.
Medical Criteria: Functional Need
An applicant must require a Nursing Facility Level of Care (NFLOC) in order to receive home and community based services via the MMAI Demonstration Program. A needs assessment to determine one’s level of care requirement is completed by a Community Care Unit (CCU) contracted by the state. The tool used is the Determination of Need (DON). To assess functional needs, one’s ability / inability to independently complete the Activities of Daily Living (i.e., transferring from the bed to a chair, mobility, eating, toileting, bathing) and Instrumental Activities of Daily Living (i.e., housework, laundry, preparing meals) is considered. A Mini-Mental Status Examination (MMSE) considers one’s cognitive functioning, such as sense of awareness and memory, which is relevant for persons with Alzheimer’s disease or a related dementia. A diagnosis of dementia in and of itself does not mean one will meet a NFLOC.
Qualifying When Over the Limits
Having income and / or assets over Medicaid’s limit(s) does not mean an applicant cannot still qualify for Medicaid. There are a variety of planning strategies that can be used to help persons who would otherwise be ineligible to become eligible. Some of these strategies are fairly easy to implement, and others, exceedingly complex. Below are the most common.
While Illinois has a Spenddown Program that permits Medicaid applicants to spend “excess” income on medical expenses in order to meet Medicaid’s income limit, the Medicare-Medicaid Alignment Demonstration Program prohibits persons from qualifying via this avenue.
When persons have assets over the limits, Irrevocable Funeral Trusts are an option. These are pre-paid funeral and burial expense trusts that Medicaid does not count as assets. Another option are Medicaid-Compliant Annuities that turn countable assets into a stream of income. There are many other options when the applicant has assets exceeding the limit.
Inadequate planning or improperly implementing a Medicaid planning strategy can result in a denial or delay of Medicaid benefits. Professional Medicaid Planners are educated in the planning strategies available in Illinois to meet Medicaid’s financial eligibility criteria without jeopardizing Medicaid eligibility. Furthermore, there are additional planning strategies that not only help one meet Medicaid’s financial criteria, but can also protect assets from Medicaid’s Estate Recovery Program, preserving assets for family as inheritance. For example, some states allow Lady Bird Deeds, a type of life estate deed that protects one’s home from Estate Recovery by automatically transferring the home to a beneficiary upon the death of the Medicaid enrollee. Unfortunately, this strategy cannot be used in Illinois. However, a Medicaid Planner can assist with an alternative option. These planning strategies often violate Medicaid’s 60-month Look-Back rule, and therefore, should be implemented well in advance of the need for long-term care. However, there are some workarounds, and Medicaid Planners are aware of them. For these reasons, it is highly suggested one consult a Medicaid Planner for assistance in qualifying for Medicaid when over the income and / or asset limit(s). Find a Medicaid Planner.
How to Apply for the Medicare-Medicaid Alignment Program
Before You Apply
Prior to submitting an application for the MMAI Program, applicants need to ensure they meet the eligibility criteria. Applying when over the income and / or asset limit(s) will be cause for denial of benefits. The American Council on Aging offers a free Medicaid Eligibility Test to determine if one might meet Medicaid’s eligibility criteria. Take the Medicaid Eligibility Test.
As part of the application process, applicants will need to gather documentation for submission. Examples include copies of Social Security and Medicare cards, bank statements up to 60-months prior to application, proof of income, and copies of life insurance policies, property deeds, and pre-need burial contracts. Unfortunately, a common reason applications are held up is required documentation is missing or not submitted in a timely manner.
Application Process
To apply for the MMAI Program, one must apply for IL Medicaid. This can be done via one’s local Department of Human Services’ Family Community Resource Center (FCRC). One can find their local office here. Persons can also call the Department of Human Services Helpline at 1-800-843-6154 to locate one’s local office. Alternatively, persons can apply online via the ABE (Application for Benefits Eligibility) portal here. A needs assessment will be completed as part of the application process to determine if the Nursing Home Level of Care need is met.
Persons already enrolled in Medicaid who meet the eligibility criteria for the MMAI Demonstration Program can enroll by calling the Illinois Client Enrollment Broker at 1-877-912-8880. A MCO health plan must be chosen or one will automatically be assigned. Persons can see a map here of available health plans by IL county.
Learn more about the Medicare-Medicaid Alignment Initiative here and here. Persons can also contact the Department of Healthcare & Family Services’ Bureau of Managed Care at 1-217-524-7478. The Centers for Medicare & Medicaid Services (CMS) and the Illinois Department of Healthcare and Family Services (HFS) administer the Medicare-Medicaid Alignment Initiative.
Approval Process & Timing
The Medicaid application process can take up to 3 months, or even longer, from the beginning of the application process through the receipt of the determination letter indicating approval or denial. Generally, it takes one several weeks to complete the application and gather all of the supportive documentation. If the application is not properly completed, or required documentation is missing, the application process will be delayed. Based on federal law, Medicaid offices have up to 45 days to review and approve or deny one’s application (up to 90 days for disability applications). Despite the law, applications are sometimes delayed even further.