Medicaid Agency Wrongly Rejected Evidence That a Transfer Fell Under the Caretaker Child Exception

A Massachusetts trial court rules that a Medicaid hearing examiner should have accepted evidence that a Medicaid applicant's transfer of her house fell under the caretaker child exception and that the applicant's other transfers were not made in order to qualify for Medicaid. Coko v. Tsai (Essex Sup. Ct. CA No. 2018-00071-A, December 13, 2018).

Pauline Coko lived in her home with her daughter, who cared for her. Ms. Coko transferred a life interest in her home to her daughter, made two disbursements from her bank account to her daughter and a granddaughter, and gifted her car to a granddaughter. When Ms. Coko applied for Medicaid, the state imposed a transfer penalty.

Ms. Coko appealed, arguing that the transfer of the life estate was an exempt transfer to a caretaker child. She also argued that the disbursement from the bank account was used to pay for her living expenses and that the gift of the car was so the granddaughter could travel to help her with shopping and appointments. The hearing examiner rejected all these arguments and upheld the penalty. Ms. Coko appealed to court.

The Massachusetts Superior Court, Essex County, reverses, holding that the hearing examiner's decision was arbitrary and capricious. According to the court, even though Ms. Coko did not present a letter from her doctor establishing her need for care, the hearing examiner should have accepted "the proffered affidavits, records, and records review" as an "alternative means of establishing Ms. Coko's entitlement to the child-caretaker exception." In addition, the court rules that there is evidence that the transfers of the cash and car were made for a purpose other than to qualify for Medicaid.

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