Medicaid Applicant Who Transferred Assets in Exchange for Promissory Note May Proceed with Suit Against State

A U.S. district court holds that a Medicaid applicant who was denied Medicaid benefits after transferring assets to her children in exchange for a promissory note may proceed with her claim against the state because Medicaid law confers a private right of action and the Eleventh Amendment does not bar the claim. Ansley v. Lake (U.S. Dist. Ct., W.D. Okla., No. CIV-14-1383-D, March 9, 2016).

Beverly Ansley and her husband owned a farm. They loaned their children cash and mineral rights and received a promissory note in exchange. Ms. Ansley applied for Medicaid benefits, but the state denied the benefits due to a lease of the farmland and the promissory note.

Ms. Ansley filed a lawsuit in federal court against the state, asking for retroactive, injunctive, and declaratory relief. She argued that her husband had terminated the farming lease, so it was no longer an issue, and that the promissory note was not a countable resource. The state filed a motion to dismiss, arguing that the statutory and regulatory provisions at issue do not grant an enforceable right under § 1983 and that the Eleventh Amendment barred Ms. Ansley's claims for relief.

The U. S. District Court, Western District of Oklahoma, denies the motion to dismiss in part. The court holds that federal Medicaid law regarding a Medicaid applicant's eligibility for Medicaid after transferring assets does confer a private right of action under § 1983. While the court dismisses Ms. Ansley's claim for declaratory relief, the court holds that the Eleventh Amendment immunity does not bar claims for injunctive or retroactive benefits.

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