Case Law Library

As part of their Medicaid spenddown, the community spouse purchased a single premium immediate annuity. However, the Department included the value of the annuity as a countable resource to the couple causing them to exceed the asset limitations and be denied benefits. The couple sued on the basis that the state's regulation conflicted with federal Medicaid law.

Following the institutionalized spouse's admittance into a full-time care facility, the couple began to reduce their assets by purchasing a single premium immediate annuity. The couple then applied for benefits, but were denied. At issue is whether a community spouse's annuity is unearned income that can be counted as a resource when determining Medicaid eligibility for the institutionalized spouse.

Following submission of her application for Medicaid, claimant was denied benefits due to her annuity not naming the State as the appropriate beneficiary. Once she had updated the contract, she was still denied benefits for the period during she which she applied. As such, the court was asked to determine whether the Division erred in rejecting Claimant's benefits application, and then erred again in affirming that rejection.

The Supreme Court of Michigan issued an important ruling in May of 2019. The case, Hegadorn v. Department of Human Services Director, No. 156132 (2019), addressed whether the principal of trusts for the sole benefit of ("SBO Trusts") the Community Spouse were countable assets for purposes of the Institutionalized Spouse's Medicaid application. The Court held that in this case, the trust principal was not countable for purposes of the application.

On June 30th, 2020, the Court of Appeals of Indiana issued a decision upholding the "Name On The Check Rule."

Weatherbee v. Richman validated that a Medicaid Compliant Annuity would not be deemed available to an institutionalized spouse when applying for Medicaid.

On November 13, 2006, the appellant was admitted to a medical institution. On this date, both the appellant and his spouse, Susan Vieth, had a total of $300,828.46 in resources. Then, on January 29, 2007, the spouse purchased two annuities in the amounts of $127,110.92 and $13,814.51. The department agreed that the annuities are within the provision of Ohio Adm. Code 5101:1-39-22.8.

In 2006, Congress amended certain regulations in the Medicaid Act in order to "tighten loopholes" that allowed people to transfer their assets for less than fair market value to qualify for benefits. A corresponding Kentucky rule mistakenly included the incorrect language. The Branch Manager for Eligibility Policy for the Kentucky Department of Medicaid Services, Marchetta Carmicle, realized that the Kentucky regulations had to align with the federal regulations so she enforced the correct federal regulation rather than the Kentucky regulation. The Singletons then sued Carmicle and the state agency "claiming a right to relief under the state regulation."

Morris v. Oklahoma Department of Human Services validated the traditional community spouse MCA planning strategy. That is to say, the ability to purchase an MCA in the name of the community spouse as a way to spend-down excess countable assets of the couple is allowable.

Miller v. Ibara is a landmark case that created the "Miller Trust," otherwise known as a Qualified Income Trust. Four elderly "mentally incompetent women" brought suit against Irene Ibarra who was the Executive Director of the Colorado Department of Social Services. These women's income was "too low to enable them to pay their own nursing home costs, but too high to qualify for Medicaid benefits." And thus, these women did not receive any benefits.