Court affirms right of state to recover funds for LTC
AZ Gov. Jan Brewer (R)
Appellant Rebecca Hutcherson's mother had filed for Medicaid assistance in 2007 due to needing long-term care assistance, court records state. Betty Hutcherson didn't qualify under the Medicaid income guidelines, so her husband John “spent down” his assets by purchasing an annuity in his name for $100,000 and then receiving a monthly stipend.
Per Medicaid rules, the Arizona Health Care Cost Containment System Administration was listed as the annuity's first remainder beneficiary, with the daughter in the second position.
When John Hutcherson died in 2008, AHCCCS had paid almost $24,000 for his wife's medical care, and continued to pay for her care at a monthly cost of $2,552.92.
Betty Hutcherson stopped receiving Medicaid assistance in 2009, and the annuity was used to pay off the balance. The program received almost $61,000 from the annuity.
Rebecca Hutcherson filed a judgment action in 2009 that says AHCCCS had no right to recover anything from the annuity or had no right to recover for costs incurred for care her mother received after her father's death.
A district court had granted summary judgment to AHCCCS, and the appeals court affirmed on Jan. 27 that the state's recovery “is not limited to the amount it paid for the institutionalized spouse's medical costs as of the date of the community spouse's death.”
It wrote that the Medicaid Act's objective was to protect the spouse from destitution, and that Mr. Hutcherson was entitled to collect monthly payments from the annuity as long as he was alive.
When Mr. Hutcherson died, the “funds remained in the annuity that could have otherwise been used to pay for Betty's medical care.”