Incapacitated Medicaid Applicant's Assets Are Not Available Resource

A Texas appeals court holds that the state could not count as available the assets of a Medicaid applicant because the applicant was incapacitated and not able to liquidate the assets. Texas Health and Human Services Commission v. Marroney (Tx. Ct. App., No. 03-18-00190-CV, May 24, 2019).

Anna Marroney suffered a stroke and entered a nursing home. Ms. Marroney's doctor described her as "totally incapacitated." A representative for Ms. Marroney filed for Medicaid benefits on her behalf in October 2015. The state denied the application because the cash value in Ms. Marroney's life insurance policies put her over the resource limit. Ms. Marroney's representative also filed a petition for guardianship, and the probate court appointed the representative temporary guardian in November 2016.

Ms. Marroney appealed the denial of Medicaid benefits, arguing that Ms. Marroney's assets should not be considered available resources because Ms. Marroney was incapacitated and could not liquidate the policies. After Ms. Marroney's guardian liquidated her assets, the state ruled that she qualified for Medicaid effective December 2016. Ms. Marroney appealed to court, and the court reversed. The state then appealed, arguing that Ms. Marroney did not become incapacitated until the probate court ruled she was incompetent.

The Texas Court of Appeals affirms, holding that because Ms. Marroney was incapacitated when she entered the nursing home, her assets were not available resources. The court finds that the evidence showed that Ms. Marroney was incapacitated when she entered the nursing home and no one else had access to liquidate her assets. According to the court, "because [Ms.] Marroney’s assets could not be liquidated during most of the disputed period, those assets could not satisfy the regulatory definition of 'resources' during that time."

For the full text of this decision, go to:

Did you know that the ElderLawAnswers database now contains summaries of more than 2,000 fully searchable elder law decisions dating back to 1993? To search the database, click here.