Veterans Benefits Not Countable as Income in Medicaid Eligibility Determination

Veterans pension benefits may not be counted as income for the purposes of Medicaid eligibility if the benefit is the result of unusual medical expenses, a U.S. district court has ruled. Galletta v. Velez (D. N.J., No. 13-532 (RBK/AMD), June 3, 2014).

Esther Stoller is the 93-year-old widow of a veteran and a resident of an assisted living facility. She received $1,113 in benefits each month from the Veterans Administration Improved Pension (VAIP), $417 of which was designated as aid and attendance and the rest as pension. Ms. Stoller applied for Medicaid 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. Stoller joined a class action lawsuit filed by Alma Galletta that sought to enjoin the state from treating VAIP payments as income for Medicaid eligibility purposes. Because Ms. Stoller was about to be evicted from her assisted living facility, she asked for a preliminary injunction, arguing that the entire income she received from her VAIP benefit resulted from unusual medical expenses (UMEs), so it should not count toward her income for Medicaid eligibility purposes. The court turned Ms. Stoller's request into a summary judgment motion.

The U.S. District Court for the District of New Jersey enjoins the state from counting Ms. Stoller's VAIP as income, holding that "in a case where claimant would not receive any VAIP benefit whatsoever if not for UMEs, then the entire VAIP benefit should be excluded from income for Medicaid-eligibility purposes." The court rules that it is clear from Ms. Stoller's documents that Ms. Stoller's VAIP would have been reduced by the amount of her Social Security benefits if not for her medical expenses.  

ElderLawAnswers member attorney Donald D. Vanarelli was one of the attorneys representing the plaintiffs. For his summary of the opinion, click here.

For the full text of this decision, go to: https://docs.justia.com/cases/federal/district-courts/new-jersey/njdce/1:2013cv00532/284386/88/0.pdf?1401878257

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