I just reviewed a Nebraska fair hearing decision, involving a community spouse ("CS") and her purchase of two post DRA Medicaid Compliant Annuities with the couple’s entire spend-down amount. The fair hearing decision is dated December 30, 2008.
The Nebraska case had facts that were very similar to the facts found in the Weatherbee case, which was decided in the United States District Court of Pennsylvania - Western District, on January 22, 2009. In the Weatherbee case, the District Judge held that when Congress added additional requirements for annuities, as outlined within the Deficit Reduction Act of 2005 ("DRA"), Congress intended that individuals and/or community spouse’s should be able to transfer countable assets into MCAs, without incurring a transfer penalty. The District Judge further rejected the DPW’s argument that Mrs. Weatherbee’s MCA should be treated as a countable resource in that it may have value on the secondary market; the District Judge held that DPW’s countable resource argument was inconsistent with the treatment of annuities under the Medicaid Act.
In the Nebraska case, the Director of the Division of Medicaid & Long Term Care ("DMLTC") held that it was proper for the community spouse ("CS") to purchase the MCAs, thus creating an income stream only for herself. The Director further held that the institutionalized spouse was eligible for Medicaid benefits, despite the argument by DHHS that J.G. Wentworth had made a contingent offer to purchase the MCA’s.
