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Politics & Society
by Robin Gerber, February 15, 2010
On Nov. 13, 2006, Susan Vieth moved her husband, Warren, then 85, out of their home in Columbus, Ohio, to the Laurels of Worthington, a nearby nursing home. Susan, who was in her late 60s, could no longer provide the care that Warren needed in their home. At the time, their entire savings totaled $300,828. The Vieths paid for Warren’s care from this money.
A little extra income
In January 2007, Susan used money from their savings to purchase two annuities from Jefferson Pilot Life Insurance Company. One was for $127,110.92, the other $13,814.51. These annuities gave Susan payments that brought her individual income to $2,300 per month.
On April 12, Susan applied on Warren’s behalf for Medicaid, the federal-state health care program for low-income people, to cover his nursing home expenses. The Franklin County Department of Jobs and Family Services conducted a routine assessment of the Vieths’ resources to determine Warren’s financial eligibility.
By law, Warren had to spend all available money on living expenses except $101,640 of their savings, which was the amount Medicaid rules allotted to Susan along with her individual income.
Not so fast
On July 1, Franklin County denied Warren’s application for Medicaid, saying that the money the Vieths had used to buy the annuities was an improper transfer of their resources. The county said the Vieths purchased the annuities to intentionally reduce their joint savings to a level that made Warren eligible for Medicaid.
At a hearing to review the county’s decision, the state said Susan shouldn’t have converted any of the couple’s savings in a way that generated income for her without the government’s prior consent.
The Vieths sued the county, arguing that Medicaid law allowed Susan to purchase the annuities because of the following requirements: The annuities were irrevocable, meaning that the amount the Vieths paid couldn’t be returned to the couple in a lump sum. The annuities were actuarially sound, and they were payable only to Susan. When she died, the state would become the beneficiary of their annuity.
Because the annuities met Medicaid requirements, the Vieths argued, they should not have been counted as part of Warren’s resources. The Franklin County Court of Common Pleas sided with the county, ordering that the annuities were an illegal transfer. Susan appealed that decision to the Ohio Court of Appeals.
Your turn! Should Warren Vieth be eligible for Medicaid? How would you decide?
Robin Gerber is a lawyer and the author of Barbie and Ruth: The Story of the World’s Most Famous Doll and the Woman Who Created Her.
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