Case Law Library

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.

In this case, the court needed to decide if income from an annuity can be counted towards the institutionalized spouse's income (Petitioner) or can it can be excluded since the payment is in the Petitioner's wife's name alone?

Zahner, Claypoole, Sanner v. Penn Dept. of Human Services validated the use of short-term MCAs in Medicaid planning. There is no limitation on how short an MCA needs to be in order to be considered "actuarially sound."

Adherence to proper procedure is essential for elder law practitioners who assist clients with Medicaid applications and benefit denials. In this article, we provide historical context to these procedures by revisiting the United States Supreme Court Case, Goldberg v. Kelly, 90 S. Ct. 1011 (1970), in which the Supreme Court was asked to answer the question: does the state's termination of a recipient's benefits without a hearing violate the 14th amendment due process clause?