Medicaid Eligibility Is Determined by Applicant’s "Available Income" Before Deductions or Exclusions Are Calculated

An Ohio appeals court rules that “available income” is determined by the Medicaid applicant’s gross income before any deductions or exclusions are calculated, and that gross income is not reduced by monthly obligations such as spousal support payments. Jerome Merritt v. Ohio Department of Job and Family Services (Ohio Ct. App., 12th, No. CA2021-04-044, Dec. 27, 2021).

Jerome Merritt is an elderly man who suffered a stroke and requires long-term, 24-hour skilled nursing care. He was admitted to a nursing home that was authorized to file an application for long-term Medicaid benefits on his behalf, requesting ongoing and retroactive coverage. The nursing home also advised Mr. Merritt’s son to establish a Qualified Income Trust (QIT), in case his father’s income was too high to receive benefits. A QIT was established and funded with $100,000 deposit, with subsequent deposits made several months later.

 Mr. Merritt receives monthly Social Security and retirement benefits totaling $3,711.48 and pays two ex-wives monthly spousal support totaling $2,055.99.

The Ohio Department of Job and Family Services denied Mr. Merritt’s application for being over the maximum income limit.  The agency’s decision was affirmed by a trial court.  Mr. Merritt appealed, arguing that a QIT was not necessary because his available income was below the maximum income threshold if his alimony payments were not considered as part of his available income.

The Court of Appeals of Ohio rules that “available income” is determined by the applicant’s gross income and is not reduced by monthly obligations or payments. Regarding Mr. Merritt’s QIT argument, the court writes that “Merritt was not entitled to have his monthly spousal support payments deducted from his income for purposes of determining whether the QIT was necessary.” Mr. Merritt’s undisputed monthly income exceeded the maximum threshold for Medicaid eligibility, the court rules.

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