A U.S. district court rules that a case by the family of a Kentucky Medicaid recipient challenging the state’s adherence to federal law regarding spousal annuities rather than to a less restrictive state regulation may proceed against the secretary of Kentucky's Medicaid agency because the secretary does not have qualified immunity. Singleton v. Commonwealth of Kentucky (U.S. Dist. Ct., E. D. Ky., No. 15-15-GFVT, March 31, 2016).
Claude Singleton entered a nursing home and applied for Medicaid. His wife, Mary, purchased an annuity with herself as annuitant. Ms. Singleton wished to name the state as remainder beneficiary up to the amount of Medicaid paid on her behalf. State regulations provide that the state must be named remainder beneficiary for the amount of Medicaid benefits paid on behalf of the annuitant, and this did not change even after federal Medicaid law was amended in 2006 to require that states be named as a remainder beneficiary for Medicaid benefits paid on behalf of the institutionalized individual. However, Ms. Singleton's attorneys – the ElderLawAnswers member firm of McClelland & Associates, PLLC -- informed her that the state Medicaid agency's branch manager would view structuring the annuity pursuant to the state’s regulation as a transfer for less than market value, so Ms. Singleton changed the state's remainder beneficiary amount to Medicaid paid on behalf of Mr. Singleton.
After Ms. Singleton died, her children, the annuity’s secondary beneficiaries, sued the secretary of the state Medicaid agency, along with other parties, arguing that state regulations may be less restrictive than federal law and that the branch manager’s alleged policy of rejecting annuities drafted pursuant to Kentucky’s own statute was improper. The state filed a motion to dismiss, arguing, among other things, that the secretary has immunity.
The United States District Court for the Eastern District of Kentucky denies the motion to dismiss the claim against the secretary in her official capacity. The court holds that because the Ms. Singleton's children are seeking prospective injunctive relief by seeking to prevent the state from collecting any more than the amount paid by the state on behalf of Ms. Singleton, the secretary is not entitled to immunity.
For the full text of this decision, go to: https://cases.justia.com/federal/district-courts/kentucky/kyedce/3:2015cv00015/77278/39/0.pdf?ts=1459523955
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