Spouse of Medicaid Recipient Not Entitled To Increased Income Allowance Because Her Financial Duress Not Caused by Exceptional Circumstances

A New Jersey appeals court recently ruled that a Medicaid recipient’s wife is not entitled to an increase in her minimum monthly maintenance needs allowance (MMMNA) because she did not demonstrate that her financial duress was caused by exceptional circumstances. K.L. v. Division of Medical Assistance and Health Services (N.J. Super. Ct., A.D., No. A-3288-10T1, March 9, 2012).

K.L. entered a nursing home and applied for Medicaid benefits. His wife, B.L., received $1,637.95 from K.L.’s monthly income as her MMMNA and the remainder of K.L.’s income went to the nursing home. K.L. filed an appeal, arguing that the MMMNA was insufficient to cover B.L.’s expenses.

The Medicaid agency determined that B.L. did not demonstrate exceptional circumstances resulting in financial duress. B.L. appealed, arguing she was entitled to an increase to help pay for repairs due to flood damage, pay premiums on four life insurance policies, and cover expenses such as cellphone and Internet access.

The New Jersey Superior Court, Appellate Division, affirmed, holding that B.L. is not entitled to an increased MMMNA because she did not demonstrate that her financial distress was caused by exceptional circumstances. The appellate court first reviewed the federal statute authorizing increases in a spouse’s MMMNA in appropriate circumstances:

If either such spouse establishes that the community spouse needs income, above the level otherwise provided by the [MMMNA], due to exceptional circumstances resulting in significant financial duress, there shall be substituted, for the [MMMNA] . . ., an amount adequate to provide such additional income as is necessary. [42 U.S.C.A. § 13964-5(e)(2)(B)(emphasis added).] See also N.J.A.C. 10:71-5.7(e) (requiring proof of “exceptional circumstances resulting in financial duress”).

According to the court, although the flood damage is not an exceptional circumstance because it should be covered by homeowner’s insurance, B.L.’s MMMNA may be adjusted if she is not fully reimbursed by insurance. The court also notes that the payment of life insurance policies is not an exceptional circumstance. The court also acknowledged that “[l]egal fees to file a Medicaid application, expenses for cell phones, internet service, newspapers or beauty are not extraordinary circumstances.”

Finally, although the court acknowledged that B.L. suffered from medical and dental problems, the court also denied relief on that basis:

[W]e note that the community spouse’s medical condition is among the more frequent bases for finding exceptional circumstances. However, the statute requires a causal connection between the exceptional circumstances and the financial duress, i.e., “exceptional circumstances resulting in financial duress.” 42 U.S.C.A. §13964-5(e)(2)(B) (emphasis added). Here, B.L. has not satisfied the dual statutory requirements because she has not shown that her circumstances are exceptional.

As a result, the appeals court affirmed the agency decision denying an increase to the spouse’s MMMNA.  The case is annexed here – K.L. v. Division of Medical Assistance and Health Services

(Case summary courtesy of  ElderLawAnswers.com)