Judge says state can tighten Medicaid rule

  • Updated: December 1, 2011 - 9:10 PM

Rejecting a plea by an elderly Twin Cities woman, a federal judge on Thursday allowed a new state rule to take effect restricting Medicaid benefits for people who give away money before seeking government help for their long-term care.

Attorneys for Angeline Ellis, 83, of Crystal, had sought a preliminary injunction to stop the change in how periods of ineligibility are calculated. But Judge Susan Nelson denied the request just hours before the rule became effective.

Ineligibility is triggered when someone gives away assets within five years before applying for Medicaid, the state-federal program for the poor that pays long-term care costs for about two-thirds of those in nursing homes. The program also helps others, such as Ellis, who seek care at home to keep them out of nursing homes.

Ellis lent her son $17,000 four years ago. Financial problems allowed him to repay only $12,250, the lawsuit said. Under the state's previous rules, Ellis' ineligibility period would have been reduced because part of the loan was returned; under the new rule the ineligibility period is not reduced unless the full amount is repaid. The new rule would have made Ellis ineligible for Medicaid for more than three months, a grave hardship because she needed care quickly, the suit said.

Ellis' attorneys argued that the new rule violated a 2010 federal law that prohibited states from tightening eligibility for Medicaid and would cause her undue harm.

Nelson ruled that the federal government had given its blessing to the new rule. She also accepted the Minnesota attorney general's interpretation of the rule that, in Ellis' case, the penalty would be calculated on the size of the remaining loan -- not the full amount as the written rule seemed to imply -- resulting in just one month of ineligibility.

WARREN WOLFE

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