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156132-4 - Ralph Hegadorn, et al v Department of Human Services Director

Ralph Hegadorn, as Personal Representative of the Estate of Mary Ann Hegadorn,

 

Nancy C. Nawrocki

James B. Steward

 

Plaintiff-Appellant,

 

v

(Appeal from Ct of Appeals)

 

 

(Livingston – Hatty, M.)

 

Department of Human Services Director,

 

Geraldine A. Brown

 

Defendant-Appellee.

 

_____________________________

 

 

Deborah T. Trim, Personal Representative of the Estate of Dorothy Lollar,

 

Nancy C. Nawrocki

 

Plaintiff-Appellant,

 

 

 

 

v

 

 

Department of Human Services Director,  

 

Geraldine A. Brown

 

 

Defendant- Appellee.

 

______________________________

 

 

Roselyn Ford,

 

 

 

Plaintiff-Appellant,

Nancy C. Nawrocki

 

(Appeal from Ct of Appeals)

 

 

(Washtenaw – Connors, T.)

 

v

 

 

 

 

 

Department of Human Services Director,

Defendant-Appellee.

Geraldine A. Brown

 

 

 

Summary

In these three cases, plaintiffs are individuals in nursing homes who applied for and were denied Medicaid for their long-term care. Before applying, plaintiffs’ spouses had created so-called “Medicaid trusts” in which the couples’ assets were transferred to a trust solely for the benefit of the non-institutionalized spouse and payable over the spouse’s lifetime. After plaintiffs applied for Medicaid, the Department of Health and Human Services changed its policy to treat these type of Medicaid trusts as “countable assets” for purposes of determining Medicaid eligibility of the institutionalized spouse. Applying this policy, an administrative law judge ruled that plaintiffs are not eligible for Medicaid. Two plaintiffs appealed to the Livingston Circuit Court, which reversed. The third plaintiff appealed to the Washtenaw Circuit Court, which reversed, relying on the ruling of the Livingston Circuit Court. In a published opinion, the Court of Appeals reversed and reinstated the department’s denials, holding that the department’s application of the Medicaid program (42 USC 1396 et seq.) is correct. The Supreme Court granted leave to appeal to address whether the Court of Appeals clearly erred in holding that the trust assets are “countable assets” for purposes of Medicaid eligibility, and whether the department could base its decision on the retroactive application of a department policy adopted more than 45 days after plaintiffs’ applications were filed. 

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