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Medicaid Annuity Report

September 2009


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September 2009



Another Court Upholds Purchase of Annuity by a Community Spouse

Written By: Attorney Jeffrey A. Marshall, CELA*

An Ohio Court of Appeals has upheld a community spouse's purchase of an annuity to protect excess resources.

When Warren Vieth entered a nursing home in November 2006, he and his wife Susan had too many financial resources to qualify for Medicaid. To reduce the couples assets to the level required for Medicaid payment of nursing home costs, Susan purchased two Medicaid compliant annuities for $141,000. Warren then applied for Medicaid payment for his nursing home care.

The State of Ohio Medicaid Agency denied Warren's application on the basis that the purchase of the annuities by his wife constituted a transfer of assets and made Warren ineligible for benefits. However, the State agency’s attempt to deny benefits was rejected by an Ohio Court of Appeals in Vieth v. Ohio Dept. of Job & Family Services.

The Ohio Court held that "funds used to purchase an actuarially sound, non-revocable, non-transferable commercial annuity, for the sole benefit of the community spouse, are not countable resources for Medicaid eligibility purposes." In support of its decision, the Court relied on James v. Richman a Pennsylvania federal court case won in 2008 by Marshall, Parker & Associates' Attorney Matthew Parker.

The Court also found that the recently enacted Deficit Reduction Act (DRA) does not prohibit the purchase of a DRA compliant annuity in order to convert excess resources into an income stream for the community spouse. Citing another Pennsylvania case, Weatherbee v. Richman, the court rejected the argument that a provision in the DRA gives the state Medicaid Agency the ability to treat a Medicaid compliant annuity, or its payments, as an available resource.

In Pennsylvania, Medicaid compliant annuities may be purchased through PCM. Attorneys seeking further information on the use of annuities to protect excess resources can find additional Pennsylvania specific information on the company's website, www.paannuity.com .

Attorney's note: the case citation is Vieth v. Ohio Dept. of Job & Family Services (Ohio Ct. App., 10th Dist., No. 08AP-635, July 30, 2009). The full text of the Vieth decision is available online at http://paannuity.com/pdf/Vieth_Ohio.pdf .

Attorney Marshall can be contacted at webmail@paelderlaw.com or at 1-800-401-4552. More information about Attorney Marshall is available at www.paelderlaw.com/staff.html

PCM helps attorneys obtain the right annuity products to meet their client's long term care planning needs. Unlike other annuity providers, PCM specializes in serving only Pennsylvania attorneys and their clients. For over ten years PCM has been the Pennsylvania lawyer's trusted resource for Medicaid annuities. It is the premier source for fast, efficient, competent, trustworthy, Pennsylvania-specific Medicaid annuity services.


For more detailed information on how to use DRA annuities to benefit your clients, Pennsylvania attorneys may consult the PCM website, www.paannuity.com or contact PCM at 570-326-1890 or webmail@paannuity.com.




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