New Jersey's Medicaid agency holds that a Medicaid applicant who made a substantial gift and purchased an annuity to help pay for the resulting ineligibility period will be eligible for benefits. M.W. v. Division of Medical Assistance and Health Services (N.J. OAL Docket No. 2998-2013, Jan. 28, 2014).
Nursing home resident M.W. purchased an irrevocable, actuarially sound, non-assignable annuity for $80,010.58. The annuity named the state as remainder beneficiary. M.W. also gifted $43,190.53 to her son. She applied for Medicaid, and the state denied her application. The state reasoned that because she made the resources unavailable by purchasing an annuity, the annuity was an available resource.
M.W. appealed and requested a fair hearing. The administrative law judge reversed the denial of the Medicaid application, finding that the annuity was not an available resource because it could not be converted into cash.
The Director of the Division of Medical Assistance and Health Services affirms the ALJ's decision. After stating that M.W. is "engaging in legal and financial gamesmanship in order to make herself Medicaid eligible, by having someone else hold funds that could be used for her care and arguing they are excluded from the resource eligibility determination," the director reluctantly finds that under state law, the annuity is not an available resource.
ElderLawAnswers member attorney Linda Ershow-Levenberg represented M.W. In a blog post on the ruling, New Jersey ElderLawAnswers member Donald Vanarelli notes that this is the first time the Division has approved a gift and annuity plan.
For the full text of this decision, go to: https://www.dvanarelli.com/wp-content/uploads/2014/02/M.W.-v.-Division-of-Medical-Assistance-and-Health-Services-Final-Agency-Decision.pdf
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