Court Declines to Resolve Medicaid Eligibility Issue

A federal court in South Dakota declared that a key Medicaid eligibility question was moot and declined to resolve it.

Upon entering a nursing home South Dakota resident Howard Johnson applied for Medicaid to cover the costs of his care. His application was denied because it was deemed he had too many assets to be eligible for care. However, in making the denial the assets of his estranged wife were counted.

Johnson requested a hearing before an administrative law judge and sought a ruling that it was improper to count his estranged wife's assets that he had no access to. The judge disagreed and ruled that an estranged spouse's assets can be used for purposes of determining eligibility for Medicaid. Johnson appealed that decision to federal district court.

The federal court determined that Johnson would not have been eligible for Medicaid based on his assets alone, and thus the court could not decide whether counting the estranged wife's assets was proper as the issue was moot.

The Wills, Trusts & Estates Prof Blog discussed this case in "New Case Concerning Inclusion of Estranged Spouse's Assets."

Legally the court probably made the right decision in not resolving the issue of including the assets of an estranged spouse. Federal courts only have jurisdiction to decide actual cases and controversies. They cannot make legal rulings in the absence of one.

On the other hand, the decision does leave a potentially important issue in other cases unresolved. Future Medicaid applicants with estranged spouses will not know whether or not the estranged spouses' assets will be counted against them.

Reference: Wills, Trusts & Estates Prof Blog (April 26, 2016) "New Case Concerning Inclusion of Estranged Spouse's Assets."

For more information on Trust and Estate Planning please visit our website.