Court Denies Preliminary Injunction to Prevent New Jersey Medicaid from Counting Annuity as Available Resource

DeniedA federal district court in New Jersey ruled that a Medicaid applicant was not entitled to a preliminary injunction to prevent the State from counting her annuity as an available resource. Matrangolo v. Velez (U.S. Dist. Ct., D. N.J., No. 13-6289 (MAS) (LHG), May 30, 2014).

Plaintiff Marie Matrangolo, an 88-year-old woman who has been a resident of a nursing facility in New Jersey since December 2010, filed a lawsuit seeking to enjoin defendants Jennifer Velez, Commissioner of the New Jersey Department of Human Services, and Valerie Harr, Director of the Division of Medical Assistance & Health Services from treating all commercial annuities as available resources in determining plaintiff’s eligibility for Medicaid.

In 2013, plaintiff purchased a single-premium, immediate payout annuity contract for $68,000.00 from the Croatian Fraternal Union of America. The annuity will be distributed in eight payments of $8,606.46 starting October 15, 2013 and is irrevocable, non-transferable, and non-assignable. According to plaintiff, the annuity complies with the requirements of the Deficient Act of 2005 (“DRA”), 42 U.S.C. §1396p(c)(1).

On October 4, 2013, plaintiff applied for Medicaid benefits with the Union County Division of Social Services (“UCDSS”). However, plaintiff’s Medicaid application was- and is-pending because she failed to provide requested information and/or verifications necessary to process her application. Notwithstanding her pending application, plaintiff commenced this action on October 22, 2013 claiming that, “[u]nless [Defendants are] enjoined from doing so, [Defendants] will wrongfully consider the DRA-compliant annuity purchased by [Plaintiff] to be a resource and thereby deny her application on [the] basis that, if counted as such, the annuity makes her in excess of allowable resources.”

The Court denied plaintiff’s motion in its entirety, ruling plaintiff failed to prove that she would be injured pendente lite if relief was not granted. The Court agreed with defendants that plaintiff’s claims were speculative since they was based on the assumption that defendants would treat her annuity as a resource and deny her Medicaid application on that ground. Defendants successfully cited the final agency decision in M.W. v. Division of Medical Assistance and Health Services, OAL Dkt. No. HMA 2998-2013 (Jan. 28, 2014), which held that the UCDSS could not count a Medicaid applicant’s non-transferable, irrevocable annuity purchased from the Croatian Fraternal Union of America as a resource. (I blogged about the M.W. v. Division of Medical Assistance & Health Services case here.) The Court also held that plaintiffs own conduct hindered the Medicaid application process (i.e., failing to provide necessary documents to facilitate review of her application).

The Court did give plaintiff a glimmer of hope however, The Court indicated that it would be willing to reconsider plaintiff’s motion for preliminary injunction if plaintiff offered evidence that she complied with defendants’ request for additional documents to complete her application, or that she would be evicted from the nursing facility absent injunctive relief.

The case is annexed here – Matrangolo v. Velez (U.S. Dist. Ct., D. N.J., No. 13-6289 (MAS) (LHG), May 30, 2014).

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