Case Law Library

Hughes v. McCarthy validated the ability for the community spouse to purchase an annuity for their sole benefit before the institutionalized spouse is Medicaid eligible but after they have been institutionalized.

Mr. Martin Fagan and Mrs. Pamela Fagan filed suit in January 2016 against Roderick Bremby who was Commissioner of the Connecticut Department of Social Services ("DSS"). The Fagans received a transfer penalty from Bremby which made Mr. Fagan ineligible for Medicaid benefits for six years.

Bryant v. Perales, 161 A.D.2d 1186 (N.Y. App. Div. 1990), is certainly not the longest decision ever written by the New York Supreme Court Appellate Division (coming in at just under six hundred words), but it is an interesting case worth discussing.  In Perales, the petitioner had requested a fair hearing after the state discontinued her medical assistance, public assistance, and food stamp benefits. The Commissioner did not review the petitioner's request relating to her Medicaid and public assistance benefits because her request for a fair hearing was not made within sixty days of the discontinuation notice.

In Ortiz v. Eichler, 794 F.2d 889 (3d Cir. 1986), the Third Circuit addressed two key elements: (1) the state's pre-hearing notice requirements under the 14th amendment; and (2) the extent to which applicants are afforded the right to confront witnesses at a hearing.

In our January 29, 2020 article, we discussed how the Massachusetts Superior Court's decision in Dermody v. Executive Office of Health and Human Services, (Mass. Super. Ct., No. 1781CV02342, Jan. 16, 2020) impacted how elder law attorneys use Medicaid Compliant Annuities in crisis planning. The primary issues in Dermody related to what is known as the "sole benefit rule" and the beneficiary designation requirements under the federal and state Medicaid law. Recently, the Suffolk County Superior Court addressed the same issues but came to a different conclusion than the court did in Dermody. Today we will discuss American National Insurance Company v. Jennifer Breslouf and the Commonwealth of Massachusetts (Mass. Super. Ct., No. 2084CV02374).

An important aspect of crisis planning is having a clear understanding of what assets will be counted for purposes of Medicaid eligibility pursuant to the rules in your jurisdiction of practice. In the 2011 case Hedlund v. Wisconsin Department of Health Services, 337 Wis.2d 634, 807 N.W.2d 672, 2011 WI App 154 (Ct. App. 2011), the Wisconsin Court of Appeals issued an important decision regarding the countability of irrevocable trusts under Wis. Stat. 49.454 (2007-08 version). Specifically, the Court of Appeals affirmed the denial of Mrs. Hedlund's application for Medicaid benefits on the basis that her irrevocable trust was countable and therefore placed her above the resource limit for eligibility.

As a result of a recent fair hearing decision, the New Jersey Medicaid agency adopted a policy of counting Medicaid Compliant Annuities written with a specific carrier as an available resource to the annuitant. However, the United States District Court for the District of New Jersey disagrees with this decision in the outcome of this recent lawsuit filed by an affected Medicaid applicant.

An important consideration in any crisis planning case is the issue of estate recovery. Estate recovery is where the state attempts to recoup costs for services rendered under the State Medicaid program upon the Medicaid recipient's death. A recent Massachusetts case, Dermody v. Executive Office of Health and Human Services, (Mass. Super. Ct., No 1781CV02342, Jan. 16, 2020),  illustrated some limitations on estate recovery.

Krause Financial Services recently consulted on a Wisconsin Fair Hearing case in which the State Agency concluded that an annuity was countable and denied the application due to excess resources.

The Institutionalized Spouse (IS) applied for MaineCare as she was currently living in a nursing home. When she received the amount she was to pay for her care, the annuity income was included in the cost calculation. The Department of Health and Human Services argued that including the annuity income in her cost of care calculation was correct. An administrative hearing was then scheduled to come to a conclusion on this issue.