Medicaid Applicant's Class Action Disputing Inclusion of Veterans Payments as Income May Proceed

A U.S. district court refuses to dismiss as moot a class action filed by a Medicaid applicant who was temporarily denied Medicaid benefits under a waiver program due to her receipt of veterans benefits because the underlying issue of whether the veterans benefit payments could be counted as income is still unresolved. Galletta v. Velez (U.S. Dist. Ct., Dist. N.J., No. 13-532 (RBK/AMD), Nov. 12, 2013).

Alma Galletta, the widow of a WWII Veteran, resided in an assisted living facility. She received $1,094 in veterans benefits each month from the Veterans Administration Improved Pension (VAIP), $684 of which was designated as pension and $410 of which was designated as "aid and attendance." Ms. Galletta applied for Medicaid benefits through a New Jersey waiver program. The state denied her benefits because her income, which included the portion of her veterans benefits designated as pension, was too high.

Ms. Galletta filed a class action lawsuit seeking to enjoin the state from treating VAIP payments as income for Medicaid eligibility purposes. Soon after she filed her complaint, the state designated her entire payment as aid and attendance and approved her Medicaid application. The state filed a motion to dismiss, arguing the issue was moot. Ms. Galletta argued that regardless of whether benefits are classified as "aid and attendance," the state should not classify VAIP payments as income.   

The U.S. District Court for the District of New Jersey denies the motion to dismiss, holding that the underlying issue is not resolved. According to the court, Ms. Galletta continues to receive VAIP payments, and as she seeks to enjoin the state from "treating her VAIP payments as income and no such injunction has been handed down, [Ms. Galletta] has not been afforded 'complete relief,' and thus her claim is not moot."

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