What emerging case law is demonstrating about Medicaid planning techniques:



Applicant does not have a community spouse

Use a promissory note with a “gift and loan” strategy. G.L. v. DMAHS, Docket No. HMARP 05080-2008N (Middlesex County), Final Agency Decision Oct. 23, 2008.

Applicant has a community spouse

Use funds above the resource allowance to purchase an annuity. James v. Richman, 465 F. Supp. 2d 395 (M.D. Pa. 2006), aff’d, ___ F.3d ___, 2008 WL 4874170 (3d Cir. 2008)

Applicant is seeking assisted living Medicaid after making a transfer for less than fair market value

Wait 5 years, or enter a nursing home for 30 days to start the penalty period; then transfer to assisted living facility. O.B. v. DMAHS, Docket No HMA – 6519-07 (Consolidated Cases)

Applicant signed a Personal Services Contract (PSC) agreeing to pay for care provided by a relative

PSCs are valid, but there can be no pre-payments for care to be provided in the future. The contract must be assignable and transferable. C.S. DMAHS, Docket Nol HMA – 1036-08 (Consolidated Cases)

Gift made by applicant is returned by the recipient of the gift. Will the penalty period resulting from the gift be reduced/eliminated?

The return of the gift will reduce/eliminate the penalty period only if the gift is returned before a Medicaid application is filed. E.S. v. DMAHS, Docket No. HMA – 14-08 (Monmouth County Sept. 30,2008)