Medicaid: Federal Law Trumps State Law When They Conflict

Georgia’s Medicaid Manual cannot be enforced when it conflicts with federal law. Applicant resided in an assisted living facility until she went to a nursing home in 2008 and applied for Medicaid. Prior to that time, her vacant home was placed on the market and sold. To accomplish the sale, Petitioner conveyed her life estate in the home which was then sold for $71,651.05. None of the funds appear to have been given to Petitioner, but her children used approximately $42,495 paying for additional assisted living care after Petitioner ran out of funds. he value of Petitioner’s life estate would have been $26,613.40 based on the sale price. DFCS imposed a transfer of resources penalty. On appeal, that decision was reversed. Petitioner argued she sold the home exclusively for a purpose other than qualifying for Medicaid, which is permitted under federal law. Citing Hines v. Davidowitz, 312 U.S. 52, 67 (1941), Georgia’s Medicaid Manual “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress and its policy is preempted by the federal statute.” The evidence was clear that Petitioner did not make the transfer to become eligible for Medicaid and proceeds in excess of the value of her life estate were actually spent on her. “The fact that her son did not pay Petitioner immediately upon conveyance of the life estate or deposit the life estate proceeds into Petitioner’s account are technicalities that are ultimately irrelevant.” Petitioner received the value of her life estate.

OSAH-Gordon-Baxter-1-2009.pdf (January 26, 2009).