Plaintiff, Eileen Flade, was a nursing home resident. On April 12, 2016, plaintiff applied for Medicaid benefits through the Bergen County Board of Social Services. Soon thereafter, plaintiff’s husband passed away. At the time of his death, plaintiff’s husband owned assets totaling approximately $70,000. Plaintiff owned less than $1,000. In his will, plaintiff’s husband left plaintiff the smallest share of his estate permitted by law, called the “elective share.” The elective share is equal to approximately one-third of the estate. However, plaintiff did not claim the one-third elective share she was legally permitted to pursue in court.

On June 9, 2016, plaintiff’s application for Medicaid benefits was denied. The Board of Social Services found that all of her late husband’s assets were available to plaintiff, thereby putting her over the resource limit of $2,000 for Medicaid eligibility. After being denied for Medicaid benefits, plaintiff feared being discharged from her nursing facility due to non-payment.

In the following month, July 2016, plaintiff filed a complaint in federal court under 42 U.S.C. § 1983 for violations of the federal Medicaid Act. In August 2016, Plaintiff filed a motion for a preliminary injunction, enjoining defendants from (1) treating the assets of her late husband’s estate as a resource that she has access to for her own care, and (2) denying Medicaid during the pendency of the litigation. Defendants opposed the motion, and cross-moved to dismiss plaintiff’s complaint. Defendants argued that even if it were true that she did not have access to her husband’s assets, plaintiff made gifts during Medicaid’s “lookback period.” The lookback period is the 60-month, or 5 year, period during which the Medicaid agency scrutinizes the applicant’s assets  to ensure that the applicant did not dispose of or transfer assets for less than fair market value in order to qualify for Medicaid. Gifts made during the lookback period would disqualify plaintiff from receiving Medicaid benefits for a period of time.

The United States District Court for the District of New Jersey denied the motions. The court held that plaintiff did not have access to her late husband’s assets and, as a result, plaintiff was reasonably likely to succeed on the merits of her claim supporting an injunction. However, the court refused to enter an injunction directing the state to provide Medicaid during the pendency of the lawsuit. According to the Court, plaintiff failed to 1) demonstrate she would suffer irreparable harm, because she had made lifetime gifts during the 5 year look back period that would result in a penalty period; 2) forcing the state to provide Medicaid during the pendency of litigation but prior to a eligibility determination would harm the State; and 3) it would not be in the public’s interest to compel the state to pay Medicaid prematurely .

The case is annexed here – Flade v. Connolly, 2016 WL 5339725 (D.N.J. Sept. 23, 2016) (unpublished)