A New York appeals court upholds the denial of Medicaid benefits to a nursing home resident, finding that two loans made by the resident’s spouse to their son during the look-back period were made for less than fair market value and, at least in part, to qualify the resident for Medicaid. Matter of Wellner v. Jablonka (N.Y. App. Div., 3rd Dept., No. 525385, April 19, 2018).
Vaira Wellner has a progressive neurological disorder and was admitted to a nursing home in October 2014. The following January, the county Medicaid agency denied her application for long-term care benefits and imposed a 45-month period of ineligibility. The agency had determined that two loans Mrs. Wellner’s husband had made to their son during the look-back period constituted asset transfers for less than fair market value and were presumed to be made to qualify Mrs. Wellner for Medicaid.
Acting as her attorney-in-fact, Mrs. Wellner’s husband requested a fair hearing. At the hearing, Mr. Wellner testified that the first loan was made in 2010 for the sole purpose of assisting their son to purchase a house locally and that it was unrealistic to believe that he knew Mrs. Wellner would need Medicaid assistance in the future. The second loan was made in 2013 and was secured by a 30-year mortgage drafted by Mr. Wellner – then aged 76 – on a house purchased for the son in New Jersey. Mr. Wellner admitted that he made the second loan despite the son having already defaulted on the first loan. Ultimately, New York’s Department of Health affirmed the agency’s decision although it did reduce the ineligibility period because of payments the son made on the mortgage. Mrs. Wellner appealed.
The New York Supreme Court, Appellate Division, affirms the agency’s decision, finding that Mr. Wellner failed to rebut the presumption that the transfers were made to qualify Mrs. Wellner for Medicaid or that they were transfers for fair market value. The court finds that Mrs. Wellner’s health had been deteriorating for a long time before she entered the nursing home and that Mr. Wellner only made belated efforts to collect on the promissory note after Mrs. Wellner was found to be ineligible for Medicaid. Further, the original mortgage was not actuarially sound in light of Mr. Wellner’s life expectancy and neither the original nor an amended version complied with Medicaid rules requiring a prohibition against cancellation of the debt upon Mr. Wellner’s death.
For the full text of this decision, go to: https://decisions.courts.state.ny.us/ad3/Decisions/2018/525385.pdf
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