In May of 2008 I worked with a Pennsylvania elder law attorney who had a Medicaid case involving a husband and wife, Mr. and Mrs. M. The institutionalized spouse, Mrs. M, entered a nursing home in March of 2008, and was expected to remain there indefinitely. After a resource assessment, Mr. M wanted to qualify his wife for Pennsylvania Medicaid benefits.
In order to eliminate the spend-down amount, pursuant to my suggestion, Mr. M purchased a Medicaid Compliant Annuity from Employees Life Company (Mutual). The Medicaid Compliant Annuity was structured over Mr. M's Pennsylvania Medicaid life expectancy.
With the spend-down amount eliminated, Mrs. M submitted a Medicaid application in May of 2008. After reviewing the Medicaid application, the Allegheny County Department of Public Welfare denied eligibility based upon the determination that the Medicaid Compliant Annuity was an available resources solely because it raised the community spouse's income above his monthly maintenance needs allowance. In support of this, the Department cited the provisions of Pennsylvania Administrative Code 55 Pa. Code § 178.124(b).
In July of 2009 it was decided that the Department of Public Welfare's position was contrary to the intent of the federal law, and further determined that Mrs. M was entitled to receive Pennsylvania Medicaid benefits.
When I sold the Medicaid Compliant Annuity in the aforementioned case, I was confident that it met the requirements of the Deficit Reduction Act of 2005, and that it was not a countable resource. With the recent decision, the case was a great win!
With the aforementioned decision in place, it is my opinion that more Medicaid Compliant Annuities will be used in community spouse planning in Pennsylvania.
Click here to review the case decision.
