An Ohio appeals court has ruled that a Medicaid applicant did not transfer assets for less than fair market value even though he sold property at below the appraised price because the sale was an arms-length transaction. Lawrence v. Ohio Department of Job and Family Services (Ohio Ct. App., 6th Dist., No. H-15-020, Sept. 2, 2016).

Eugene Lawrence owned a rental property that he could no longer maintain, so he sold it in 2011 for $22,720, which was the remaining balance on the mortgage. The auditor had appraised the property at $66,800. In 2014, he entered a nursing home and applied for Medicaid. The state determined that because Mr. Lawrence sold the property for less than the fair market value, it was an improper transfer, and it imposed a penalty period.

Mr. Lawrence appealed the decision. After a hearing, the state upheld the penalty period, and Mr. Lawrence appealed to court. The trial court found that Mr. Lawrence sold the property in an arms-length transaction, so the state should not have imposed a penalty period. The state appealed.

The Ohio Court of Appeals, Sixth District, affirmed, holding that Mr. Lawrence did not transfer assets for less than market value. According to the court, "the market conditions at the time of the sale combined with the condition of the property and circumstances of the sale demonstrated an arms-length transaction for fair market value."

Although the result is comforting for those who must plan for Medicaid eligibility, the case is instructive of the difficulties applicants may face.  The state upheld the decision on appeal to an Administrative Law Judge, but the Common Please Court held in favor of the applicant.  The applicant then was forced to defend the decision in the Court of Appeals.  Proceeding through the court system is not easy, or inexpensive.  

For the full text of this decision, go here.

Advocates Seek Better Notification for Those Nearing Medicare Eligibility

Forty-four organizations, including the Medicare Rights Center, urged the Department of Health and Human Services, the Department of Labor and the Social Security Administration to implement a system for notifying individuals approaching Medicare eligibility to inform them of their rights and obligation as they near enrollment.

The organizations asked that the agencies to ensure that all individuals nearing Medicare eligibility receive timely and complete notice about Medicare enrollment. According to the letter, such a system will ensure that fewer people new to the Medicare program are saddled with higher health care costs or go without needed health care services due to gaps in coverage and late enrollment penalties resulting from missing enrollment windows.

In particular, the letter suggests the following:

• Provide notice about nearing Medicare eligibility to all individuals turning age 65;

• Ensure that notices include key messages about coordination of benefits and delaying enrollment;

• Carefully engage other messengers, including health plans, employers and states;

• Strengthen notice for those who are auto-enrolled into Medicare; and

• Develop notices and educational materials in additional languages and alternate formats.

The Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs and public policy initiatives.  Click here to read the letter.