Retirement accounts held in the name of the community spouse should be exempt and not a countable resource in a Medicaid application. A recent Medicaid application denial and subsequent fair hearing decision puts that long held Idaho rule in jeopardy. In that case, the applicant had used a portion of her IRA to purchase a qualified deferred annuity. The Department denied the application and counted the qualified annuity as a resource.
At Fair Hearing, the Department argued (and the Fair Hearing Officer agreed) that IDAPA 16.03.05.215 (the provision stating that a retirement account in the name of the community spouse is not a resource) does not apply when one of the spouses is in a nursing home. If the Department is right on this argument, it could mean that any retirement account owned by the community spouse is a resource if the Medicaid applicant is not living at home.
This result seems to be contrary to both Idaho law and to Federal law. For instance, IDAPA 16.03.05.737 seems to incorporate IDAPA 16.03.05.215 any time FSI rules are being used by a couple. It isn’t clear whether this signals a change in the Department’s stance on IRAs or if this is just a case where bad facts lead to an unclear result.
What is clear is that if you have a case where the couple holds retirement assets it is vital that you contact a good elder law attorney to walk you through the best way to ensure that this type of result does not happen to your residents.
See the full text of the Fair Hearing Decision here.