May 22

Reservation of Power of Appointment in Deed Does Not Conflict With Conveyance of Property to Children

Margaret Hession sought legal assistance to protect her house in the event she might need Medicaid benefits. As part of the Medicaid planning, she executed a deed transferring her house to her children. The deed reserved a life estate for her and granted her a special power of appointment that allowed her to appoint the property to any person except herself, her creditors, her estate, or her estate’s creditors. Ms. Hession decided her daughter Deaven Skye should inherit less than her other children. She wrote a will that exercised her power of appointment and reduced Ms. Skye’s interest in the property from one-third to 5 percent.

After Ms. Hession died, Ms. Skye objected to the will and argued that the power of appointment was void. The trial court dismissed Ms. Skye’s objection and admitted the will to probate. Ms. Skye appealed, arguing that the provisions in the deed granting the remainder interests and reserving a power of appointment are irreconcilably repugnant to each other.

The Massachusetts Court of Appeals, rules that the reservation of the power of appointment is consistent with the other provisions of the deed. According to the court, “because of the reservation of the life estate, the deed conveyed not present possessory estates but rather remainder interests; and, because of the reservation of the power, the remainder interests were defined, in part, by this limitation.” The court specifically does not express a “view on the effect of the reserved power of appointment on [Ms. Hession’s] strategy of avoiding MassHealth look-back period regulations.”

For the full text of this decision, click here.

May 19

Medicaid Recipient Who Transferred Assets to Wife During Period of Ineligibility Is Subject to Penalty Period

Martin Fagan was injured in a motorcycle crash and entered a nursing home. In 2012, he began receiving Medicaid benefits. In 2015, he received a $2 million personal injury settlement, and the state discontinued his Medicaid benefits. Mr. Fagan transferred $879,453.32 of the settlement proceeds to his wife in two chunks. When Mr. Fagan reapplied for Medicaid, the state determined that he transferred assets for less than market value and imposed a transfer penalty.

Mr. Fagan appealed, arguing that because the transfers to his wife were pre-eligibility transfers, he could transfer an unlimited amount to her without incurring a penalty. The state upheld the penalty period, and Mr. Fagan sued for injunctive relief in federal court. The state and Mr. Fagan filed motions for summary judgment.

The U.S. District Court, District of Connecticut, grants summary judgment to the state, holding that the penalty period is appropriate. The court rules that any transfer to a community spouse made after the institutionalized spouse is Medicaid eligible is prohibited if it happens during the same period of institutionalization. According to the court, there is no reason why statutory language “should be interpreted to give an institutionalized individual, found ineligible for benefits upon redetermination, a second opportunity to make transfers to his spouse prohibited at the time of his initial eligibility determination when the coverage relates to the same period of institutionalization.” 

For the full text of this opinion, click here.

April 21

Medicaid Applicants Who Did Not Receive Post-Default Notice Are Entitled to Summary Judgment

Once New York State determines a Medicaid applicant is no longer entitled to Medicaid, it sends a letter notifying the applicant that he or she may request a fair hearing. The state then sends two more letters, notifying applicants that a fair hearing has been requested and scheduled. If an applicant misses the hearing, a default judgment will be entered against him or her.

Two Medicaid applicants initiated a class action against the state of New York, claiming that the state does not provide proper notice before entering a default judgment. The applicants asked for a preliminary injunction, requiring the state to mail a default notice to applicants before their appeals are abandoned. The U.S. district court granted the applicants a preliminary injunction, holding that the applicants showed a likelihood of success on the merits based on federal and state regulations. The applicants filed a motion for summary judgment. The state argued that the applicants did not have standing because they did not show that they were injured by not receiving another notice.

The U.S. District Court, Eastern District of New York, grants the applicants’ motion for summary judgment and makes the preliminary injunction permanent. According to the court, the applicants demonstrated irreparable injury because the wrongful denial of Medicaid benefits is “the type of non-monetary, imminent harm that is properly characterized as irreparable.”

For the full text of this decision, go to:

April 19

HHS/CMS Letter to Governors Signals Medicaid Priorities

In a letter to governors, Secretary of Health and Human Services Tom Price and Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma outline the key areas the administration wants to work on with states. The letter describes “a new era” where states have more freedom to design programs to meet the diverse needs of their populations.

Included as a priority in the letter is making the state plan amendment process “more transparent, efficient, and less burdensome,” including facilitating expedited review of waivers. The letter indicates that CMS will be more likely to approve waiver programs that have already been approved in another state. The letter also states that CMS will provide extra time for states to comply with the 2014 Home and Community-Based Services Rule.

Other priorities included in the letter are supporting innovative approaches to increasing employment and community engagement, aligning Medicaid with private insurance, and providing states with more tools to address the opioid crisis.

To read the letter, click here.

January 11

2017 Key Medicare & Medicaid Figures

Below are the most important figures seniors and their families will confront in 2017:

Medicare Part A deductible: $1316 for each benefit period

Medicare Part A hospital stay day 1-60: $0 co-insurance for each benefit period

Medicare Part A hospital stay day 61-90: $329/day co-insurance for each benefit period

Medicare Part A hospital stay beyond 91 days: $658/day co-insurance for each benefit period

Medicare Part B Premium: $134/month.

Medicare Part B Deductible: $183/year

Medicare Skilled nursing home co-payment day 21-100: $164.50/day

Medicaid Individual Resource Allowance: $2000.00

Resource Allowance for a Couple who both reside in a facility: $3,000.00

Medicaid Community Spouse Resource Allowance: Minimum $24,180.00; Maximum $120,900.00

Medicaid Monthly Maintenance Needs Allowance: Minimum $2,002.50; Maximum $3,022.50

Medicaid Monthly Personal Needs Allowance: $35.00/month

Medicaid Divestment Penalty Divisor: $332.50/day

Medicaid Income Cap Limit: When is a Miller Trust required? $2205/month

Principal Residence Equity Exclusion: $840,000.00

Community Spouse Monthly Housing Allowance: $600.75

Standard Heating & Utility Allowance: $501.00

Federal Estate Tax Threshold: $5,490,000

Federal Gift Tax Exclusion: $14,000.00

NJ Estate Tax Threshold: $2,000,000.00

NJ Inheritance Tax: Class A & E exempt

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