Case Law Library

In this consolidated case, nursing home residents were denied Medicaid benefits resulting from their purchase of a short-term Medicaid Compliant Annuity. The applicants purchased the annuity as part of a half-a-loaf gifting strategy, but were assessed a period of ineligibility resulting from the annuity purchase. According to the Department, the annuities were sham transactions and classified them as trust-like devices. After analyzing controlling statutes and instructive case law, the Court reversed the Department's determination.

In preparation of her imminent admittance to a nursing home, the applicant executed a Power of Attorney (POA) document authorizing her husband to make certain transfers on her behalf. However, after the transfers were completed, it was determined that the applicant lacked the capacity to execute these documents making the documents invalid. As a result, the guardians of the applicant's estate requested that the assets that were converted under the powers provided to the husband in the POA documentation be returned to her.

The Plaintiff's application for Medicaid benefits was denied after the Department included the income stream from the community spouse's Medicaid Compliant Annuity as an asset. Despite the annuitant obtaining a letter stating that the policy could not be sold, the Department alleged that they located a buyer for the policy. After reviewing Title XIX, SSI methodology, and Third Circuit analysis on the issue, the court determined that the annuity's income stream was not an available asset.

A Medicaid applicant's promissory note was scrutinized in this case after she sold her farm and Edward Jones account to her son in exchange for the promissory note. Because the note complied with federal regulations, the Court determined that the promissory note was not a liquid asset and could not be defined as a "resource." As such, the promissory note was exempt from a transfer penalty.

Following their application for Medicaid, the institutionalized spouse was denied long-term care benefits because the annuity that was purchased by the community spouse as part of the couple's spend-down was found to be an improper transfer of assets. The Court reversed the Department's treatment of the annuity, determining that this type of spend-down was not only permissible under federal and Ohio state law, but such purchases were also held proper in a similar Ohio Court of Appeals case.

This case was brought before the Missouri Court of Appeals by a group of couples who were denied long-term care benefits under Missouri's Medicaid program because of their ownership of certain annuities. According to Missouri law, the annuity income stream must be paid to the institutionalized spouse if the annuity value was to be considered an exempt asset. However, drawing upon relevant federal statutes and prior judicial interpretations, the Court determined that the State's eligibility methodology was more restrictive than federal law.

Wisconsin statutes regarding the proper treatment of irrevocable trusts were evaluated in this case to determine whether the Medicaid applicant's irrevocable trust should be considered an available asset or not for Medicaid eligibility purposes. The court reached its decision to affirm the Department's determination by interpreting the relevant Wisconsin statutes in light of its plain language and common meaning.

Annuities that are held within the Medicaid applicant's IRA are often treated differently than other annuities. In this case, the Department determined that the Medicaid applicant was subject to a period of ineligibility because she "transferred" an IRA annuity and failed to name the Department as a beneficiary. Based on federal law, the Court determined that if an annuity was IRA-owned, it was not included within the term "assets" and could not be treated as a disqualifying transfer nor was the Department required to be named as a beneficiary.

An early interpretation of spousal transfers, this case evaluates whether an annuity purchased by the institutionalized spouse for the sole benefit of the community spouse with the couple's excess resources, should be classified as a disqualifying transfer of assets and the annuity itself be considered a non-exempt asset.

The "Name on the Check Rule" strategy was scrutinized in this matter when Appellant used the funds from his IRA to purchase an annuity. The annuity named his spouse as the beneficiary and payee. The Department approved the application for Medicaid, however, the income payments from the annuity were included as part of the applicant's income and not the spouse's income.