Case Law Library

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.

When purchasing a Medicaid Compliant Annuity (MCA), the policyholder has the right to a 30-day freelook period. However, in some cases, the policyholder can waive that cancellation period allowing the contract to become immediately irrevocable. In this case, despite the Petitioner completing the proper forms to waive the freelook period, the Department included the MCA as an available resource during that period. As such, Petitioner was not eligible for Medicaid benefits until the month after the policy's freelook period had expired. Petitioner appealed.

Following the Petitioner's admittance to a nursing home, the community spouse purchased an annuity with a portion of the couple's excess resources. The couple applied for Medicaid and the county completed a resource assessment where it was determined that the community spouse's purchase of the annuity constituted an improper transfer of assets. As such, the institutionalized spouse was assessed a period of ineligibility. The couple appealed the department's determination to the state trial court.

In this case, a question of whether Minnesota's Medicaid plan conflicted with federal law was raised when Minnesota's eligibility requirements stated that a penalty period could no longer be shortened by a partial return of assets.

The Georgia Department of Community Health (DCH) imposed an asset transfer penalty on four different Medicaid applicants because either they or their spouse did not name the state as the appropriate remainder beneficiary of the annuity. The court held that the annuity purchased by the institutionalized individual was protected from a penalty. However, the annuities purchased by the community spouses were subject to the penalty and were required to list the state as the appropriate beneficiary.

In this case, the payments made to the Petitioner's son under the terms of the Personal Services Agreement (PSA) were examined after the Petitioner failed to provide a sufficient summary of the care services that were provided by the son. As such, DHS determined that the payments made to Petitioner's son were uncompensated transfers and assessed him a 13-month period of ineligibility. Petitioner appealed the Department's decision.