Annuity; Transfer Penalty for Failing to Name State as Beneficiary. Petitioner, a 95 year old nursing home resident, applied for Medicaid on December 15, 2008. DFCS denied eligibility and imposed a transfer of resources penalty because she had purchased an annuity without naming the State of Georgia as a beneficiary. The annuity was irrevocable and non-assignable, was actuarially sound and provided for immediate monthly payments of $1,648.41 for 52 months with no deferral and no balloon payments. All of Petitioner’s other resources qualified for the burial exclusion and a QIT was used since Petitioner’s income with the annuity exceeded the income cap. The ALJ held that the annuity could not be penalized because a transfer penalty may only be imposed on an asset and the annuity was not an asset. Although this is a misreading of the code, the ALJ reversed assessment of the transfer penalty. Technically, under the federal Medicaid statute, “asset” includes all income and resources. 42 U.S.C. 1396p(h)(1) and a transfer penalty may be imposed when income or resources are transferred for less than fair market value. Confusing the terms, the ALJ seemingly decided that a transfer penalty may only be assessed on transfers of resources.
Harbin v. Department (May 7, 2009).
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