In 2006, I worked with a Pennsylvania elder law attorney who had a Medicaid case involving a husband and wife, the Weatherbees. The institutionalized spouse, Mr. Weatherbee, entered a nursing home in September of 2006, and was expected to remain there indefinitely. After a resource assessment, Mrs. Weatherbee wanted to qualify her husband for Pennsylvania Medicaid benefits.
In order to eliminate the spend-down amount, pursuant to my suggestion, Mrs. Weatherbee purchased a Medicaid Compliant Annuity from Jefferson-Pilot Life Insurance Company. The Medicaid Compliant Annuity was structured over Mrs. Weatherbee's Medicaid life expectancy.
With the spend-down amount eliminated, Mr. Weatherbee submitted a Medicaid application in February of 2007. After reviewing the Medicaid application, the Pennsylvania Department of Public Welfare determined that Mrs. Weatherbee's Medicaid Compliant Annuity was an available resource, in that the income stream could be sold on the secondary market. Despite the fact that the Medicaid Compliant Annuity endorsement page clearly precluded such a sale, the Department of Public Welfare's position was sustained.
The Brief for Amicus Curiae in the United State Court of Appeals listed five legal arguments to support the Weatherbee decision, to-wit:
- The Deficit Reduction Act of 2005 did not change Congress' view of the benefits of annuities in protecting the income of the community spouse or the treatment of annuities in the context of Medicaid eligibility for the institutionalized spouse.
- The District Court properly held that the secretary violated the Medicaid Act, specifically MCCA, by counting the community spouse's income derived from the annuity.
- The Deficit Reduction Act illustrations that the income of the community spouse should not be considered a countable resource either under existing or prior federal law.
The remaining arguments can be found in the Brief for Amicus Curiae in the United State Court of Appeals. Click here to download the document.
