Opinion ID: 2830698
Heading Depth: 1
Heading Rank: 2

Heading: Ohio Admin. Code 5101:1-39-07 (nka 5160:1-3-

Text: 07) permits the unlimited transfer of assets from an institutionalized spouse to the community spouse prior to Medicaid eligibility and such transfer does not constitute an improper transfer of assets that would result in a period of restricted eligibility for Medicaid. {¶ 3} We reject appellant’s propositions of law. We agree with the state that during the period between an application for Medicaid benefits and the notice of Medicaid approval, federal and state Medicaid law allows an institutionalized spouse to transfer a home or equivalent assets to a spouse living in the community, but only up to the community spouse resource allowance (“CSRA”). Under 42 U.S.C. 1396r-5(c)(2)(B) and Ohio Adm.Code 5160:1-3-36.1(E), the 2 January Term, 2015 community spouse must make any amount above his or her CSRA available to the institutionalized spouse. Otherwise, the state may take legal action. In this case, however, the state may have imposed a penalty on the community spouse that is not authorized by law. We therefore remand the case to the trial court to apply 42 U.S.C. 1396r-5(c)(2)(B) and Ohio Adm.Code 5160:1-3-36.1(E) and make adjustments accordingly if any are needed. Historical Background of Medicaid {¶ 4} Congress established the Medicaid program in 1965 to provide federal funds to states to help them provide medical services to the poor. Schweiker v. Gray Panthers, 453 U.S. 34, 36, 101 S.Ct. 2633, 69 L.Ed.2d 460 (1981). In 1972, the program was amended to include assistance to the elderly in long-term institutionalized care. Id. at 38. The 1972 Medicaid statute allowed states to consider the resources of the spouse not institutionalized (“the community spouse”) in determining whether the institutionalized spouse met the low-asset threshold for Medicaid assistance. Wisconsin Dept. of Health & Family Servs. v. Blumer, 534 U.S. 473, 479-480, 122 S.Ct. 962, 151 L.Ed.2d 935 (2002). However, the required spend-down limits imposed on couples in order to qualify for long-term care under Medicaid nearly bankrupted some who held their assets jointly: “Many community spouses were left destitute by the drain on the couple’s assets necessary to qualify the institutionalized spouse for Medicaid and by the diminution of the couple’s income posteligibility to reduce the amount payable by Medicaid for institutional care.” Id. at 480. Affluent couples, by contrast, could title their assets so as to impoverish the institutional spouse, thereby both qualifying the institutionalized spouse for Medicaid and preserving family wealth. Id. {¶ 5} In response, Congress enacted the Medicare Catastrophic Coverage Act of 1988 (“MCCA”), which added 42 U.S.C. 1396r-5, introducing the CSRA 3 SUPREME COURT OF OHIO calculation. Congress also amended 42 U.S.C. 1396p to address agency treatment of annuity purchases. Hughes v. McCarthy, 734 F.3d 473, 476 (6th Cir.2013). {¶ 6} The MCCA permitted the community spouse to “reserve certain income and assets to meet the minimum monthly needs” of that spouse when the institutionalized spouse became eligible for Medicaid. Blumer at 477-478. Congress “installed a set of intricate and interlocking requirements with which States must comply in allocating a couple’s income and resources.” Id. at 480. Ohio’s regulations that interlock with 42 U.S.C. 1396r-5 are delineated in Ohio Adm.Code 5160:1-3 (Medicaid resource budgeting for institutionalized individuals with community spouse), formerly numbered Ohio Adm.Code 5101:1-39 and identified by the old number in most of the relevant caselaw. Now, under both current federal and Ohio law, “a portion of the couple’s assets is reserved for the benefit of the community spouse.” Blumer at 482; 42 U.S.C. 1396r-5(f)(2)(A); Ohio Adm.Code 5160:1-3-36.1(A)(2). That portion of the couple’s assets is the CSRA. {¶ 7} In anticipation of Medicaid eligibility, a couple may ask that its resources, however titled, be calculated on the day a spouse is institutionalized. Blumer, 534 U.S. at 482, 122 S.Ct. 962, 151 L.Ed.2d 935. Half that total is allocated to the community spouse. Id. All resources above the CSRA “must be spent before eligibility [for Medicaid] can be achieved.” Id. at 483. The question here is whether the regulatory framework allows an exception in the law so that the institutionalized spouse may transfer unlimited resources to the community spouse without regard to the CSRA after one spouse is institutionalized but before the couple knows that it is Medicaid-eligible.