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Singleton v Commonwealth of Kentucky

In 2006, Congress amended certain regulations in the Medicaid Act in order to “tighten loopholes” that allowed people to transfer their assets for less than fair market value to qualify for benefits. A corresponding Kentucky rule mistakenly included the incorrect language. The Branch Manger for Eligibility Policy for the Kentucky Department of Medicaid Services, Marchetta Carmicle, realized that the Kentucky regulations had to align with the federal regulations so she enforced the correct federal regulation rather than the Kentucky regulation. The Singletons then sued Carmicle and the state agency “claiming a right to relief under the state regulation.”


Initially, Congress made an error when passing the annuity provision. It stated that the State was allowed to recover only “the total amount of medical assistance paid on behalf of the annuitant.” That total amount, in most cases, is usually zero with the community spouse purchasing the annuity in their name. Congress then retroactively amended the provision ten months later. They changed “the annuitant” to “the institutionalized individual.”


Four months after the change, the Kentucky Department of Medicaid Services created a regulation that worked off of the original, incorrect, federal provision. The Kentucky provision, however, was not enforced as it was written, rather the corrected federal provision was what Carmicle used when looking at Medicaid applicants.


Mary Singleton purchased an annuity in order to help Claude Singleton become Medicaid eligible. Mary wanted to name the State as beneficiary for the value of care provided to her, rather than Claude, the institutionalized spouse. The written Kentucky regulation supported Mary’s choice. However, her lawyer informed her that the agency was enforcing the federal rule, not the written Kentucky rule. Mary then purchased an annuity that aligned with the federal regulations.


Claude received Medicaid eligibility. After both Claude and Mary passed away months later, the agency collected what they were allowed for the full amount of Claude’s care. There was then a small sum of money left over for secondary beneficiaries.


Claude and Mary’s children filed an action against the Secretary of the Kentucky Health and Human Services, “seeking an injunction and a declaratory judgment that the State has no right to the funds remaining in the annuity and that the funds remain the property of the Singletons.” They also filed against Carmicle for enforcing a policy that violated Kentucky and federal law.


Whenever state law and federal law have differing regulations, federal law will supersede state laws. Thus, the Kentucky regulation became void and because Carmicle’s policy was bound by federal law, she did not violate any of the Singletons’ rights and she owed them no relief. The Singletons’ children’s claims against her were dismissed.


The court reversed and remanded to the district court for proceedings consistent with this opinion.


The full document text can be found here.