The Ohio First District Court of Appeals rules that the state improperly imposed a penalty period on a Medicaid applicant whose wife purchased an annuity, holding that Ohio's regulations with respect to annuities are improperly restrictive based on the preemption of federal law. The ElderLawAnswers member firm of Thom L. Cooper represented the Medicaid applicant. Rorick v. Ohio Dept. of Job & Family Services (Ohio Ct. App., 1st Dist., No. C--090627, November 19, 2010).
Paul Rorick was admitted to a nursing home in May 2008. The following month, Mr. Rorick's wife, Betty, purchased an immediate annuity for $14,562.55. When Mr. Rorick applied for Medicaid in August 2008, his application was approved but a two-and-a-half-month penalty period was imposed based on the state's claim that the annuity constituted an improper transfer. Mr. Rorick appealed the decision, arguing that the Deficit Reduction Act of 2005 provides that a properly structured immediate annuity is not an improper transfer of assets, even if purchased by the community spouse after the resource assessment ("snapshot") date.
At the trial court, the state argued that the annuity rule applies only to the Medicaid applicant, not the community spouse. The trial court ruled in Mr. Rorick's favor, holding that it was a violation of the Medicaid Catastrophic Coverage Act, federal Medicaid law and the Supremacy Clause for the annuity purchase to be treated as an improper transfer. The state appealed.
The Court of Appeals, First Appellate District of Ohio (Hamilton County) affirms, finding that Ohio cannot use a Medicaid eligibility methodology based on resources and income in a manner that is more restrictive than the resource standards of the Supplemental Security Income program.
Mr. Rorick was represented by the Ohio ElderLawAnswers member firm of Thom L. Cooper Company, LPA. In a press release announcing the decision, the firm notes that "This case, when coupled with Vieth [v. Ohio Dept. of Job and Family Services], should provide elder law attorneys in Ohio with more confidence to pursue additional options on behalf of their elderly clients to avoid spousal impoverishment of the community spouse consistent with the new provisions of the Deficit Reduction Act."
For the full text of this decision, go to: https://www.supremecourt.ohio.gov/rod/docs/pdf/1/2010/2010-ohio-5571.pdf .
(The decision is in PDF format. If you do not have the free PDF reader installed on your computer, download it here.)
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