Medicaid Applicant Who Was Denied Benefits After Purchasing Annuity for Spouse May Proceed with Claim Against State

A U.S. district court rules that a Medicaid applicant who purchased an annuity for his spouse may proceed with a claim against the state Medicaid agency, which had found he had transferred resources for less than fair market value. Jackson v. Selig (U.S. Dist. Ct., E.D. Arkansas, No. 3:10CV00276-WRW, Dec. 22, 2010).

Richard Jackson lived in a nursing home and applied for Medicaid benefits. The state denied Mr. Jackson's application because he had more than $300,000 in available resources. Mr. Jackson purchased an annuity for his wife for $248,949.09 and a smaller annuity for himself, and then reapplied for benefits. The state found Mr. Jackson transferred resources for less than fair market value and issued a 69-month penalty period.

Mr. Jackson sued the state in federal court, seeking a declaratory judgment that the state was in error when it found him ineligible for benefits based on his purchase of an annuity for his wife. The state filed a motion to dismiss.

The U.S. District Court for the Eastern District of Arkansas denies the motion to dismiss. The court finds "that a qualifying annuity, solely for the benefit of the community spouse, will be a [sic] considered available only to that spouse, not to the applicant, and that it would be improper for the state agency to count the income of the community spouse to determine Medicaid eligibility." The court notes that Congress could have prevented the use of annuities in Medicaid planning, but the Deficit Reduction Act allows for qualifying annuities.

For the full text of this decision, go to: https://attorney.elderlawanswers.com/jackson-v-selig-us-dist-ct-ed-arkansas-no-310cv00276-wrw-dec-22-2010-8860

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