Blog

The Ohio First District Court of Appeals has jumped on the bandwagon of improperly imposing a penalty period on a Medicaid applicant whose spouse purchased an annuity.

In the most recent case, Rorick v. Ohio Department of Job and Family Services, Mr. Rorick was admitted to a nursing home on May 29^th, 2008, while Mrs. Rorick continued to reside in the community.  At the time of institutionalization, the couple had combined resources of $74,224.61.  On July 21^st, 2008, Mrs. Rorick purchased an annuity in the amount of $14,562.55.  Mr. Rorick then applied for Medicaid assistance on August 22^nd, 2008.

When the Hamilton County Department of Job and Family Services ("the County") conducted a resource assessment it was determined that Mrs. Rorick's annuity purchase, which occurred after the date of institutionalization, was an "improper transfer of assets."  As such, the County imposed a penalty period of 2.5 months on Mr. Rorick.

Mr. Rorick appealed the County's decision and argued that the Deficit Reduction Act of 2005 provides that a properly structured immediate annuity is not an improper transfer of assets, even if purchased by a community spouse after the date of institutionalization (e.g. resource assessment or snapshot date).

The trial court reversed both the state hearing officer's decision and the administrative appeal decision, specifically ruling that the County had erred in determining the purchase of the annuity was an improper transfer.  Furthermore, the court ruled that the County had erred in treating the annuity as a countable resource, imposing a penalty period, and that the County's findings were in violation of federal Medicaid law.  The state appealed.

The Court of Appeals, First Appellate District of Ohio (Hamilton County) affirms, finding that the County cannot use a Medicaid eligible methodology based on resources and income in a manner that is more restrictive than the resource standards of the Supplemental Security Income program.

You may view the full text of the decision here.