In those cases where a community spouse (Mary Smith) purchases a Medicaid Compliant Annuity ("MCA”) with the couple’s spend-down amount, what happens if the community spouse predeceases the institutionalized spouse? Assuming the state Medicaid program is the primary beneficiary to the extent that medical assistance benefits were provided to the institutionalized spouse (Robert Smith), is the state’s Medicaid claim frozen at the point of Mary’s death? Or, in the alternative, does the state Medicaid program have an open claim until Robert’s death? Does it make a difference if the MCA allows the primary beneficiary to elect a cash settlement of the remaining monthly payments? Would it not make sense to state that the primary beneficiary is: "The state Medicaid program to the extent that medical assistance benefits were provided to the institutionalized spouse (Robert Smith); the claim shall not extend beyond the annuitant’s (Mary Smith) death."
