MGE 180617 (06/12/2017)
Life insurance labeled “Funeral Plan” was countable

Preliminary Recitals

Pursuant to a petition filed on April 10, 2017, under Wis. Stat. § 49.45(5), and Wis. Admin. Code § HA 3.03(1), to review a decision by the Outagamie County Department of Human Services regarding Medical Assistance (MA), a hearing was held on June 6, 2017, by telephone.

The issue for determination is whether the agency correctly denied the Petitioner’s application for Medicaid benefits.

There appeared at that time the following persons:

PARTIES IN INTEREST:

Petitioner:
—

Petitioner’s Representative:
—

Respondent:
Department of Health Services
1 West Wilson Street, Room 651
Madison, WI 53703
By: —, Staff Development Specialist
Outagamie County Department of Human Services
401 S. Elm Street
Appleton, WI 54911-5985

ADMINISTRATIVE LAW JUDGE:
Mayumi M. Ishii
Division of Hearings and Appeals

Findings of Fact

1. Petitioner (CARES # —) is a resident of Outagamie County.
2. On January 20, 2017, the Petitioner applied for Medicaid Benefits.
3. At the time of application, the Petitioner had insurance with a face value of $3,900, with a cash surrender value of $3,390.75. It was labeled as a ”Funeral Plan”. (Exhibit 6)
4. In Petitioner’s Medicaid Application, no specific burial insurance was listed, but next to the words “Section 7—Burial Assets”, Petitioner wrote in “SSA—Puerto Rico —”. This turned out to be a reference to the “Funeral Plan” policy. (Exhibit 5 and Exhibit 6)
5. On February 20, 2017, the agency sent the Petitioner a notice, indicating that her application was denied because she was over the asset limit. (Exhibit 9)
6. The Petitioner filed a request for fair hearing that was received by the Division of Hearings and Appeals on April 10, 2017. (Exhibit 1)

Discussion

In order to be eligible for Medicaid Benefits, a one person household must have assets below $2000.00. Medicaid Eligibility Handbook (MEH) §39.4.1. The cash value of life insurance policies must generally be counted as an asset. MEH § 16.7.5

Although, the Petitioner’s insurance plan was labeled a “Funeral Plan”, it had a cash surrender value. Per MEH §16.5.2, if a policy has a cash surrender value it is considered life insurance, not burial insurance. Accordingly, per MEH §16.7.5 The cash value must be counted. In this case, it was $3,390.75.

Consequently, Petitioner was over the $2000 asset limit.

Petitioner’s representative argues that the Petitioner should be found eligible had the agency informed the Petitioner in January of the asset issue, that she would have cashed out the policy and purchased an irrevocable burial trust, so that she would meet eligibility requirements for the month of January, but because the agency did not inform Petitioner of the problem with her “Funeral Plan” insurance policy, she was not able to make the necessary change until April 2017. Petitioner’s representative also argues that it is unfair to deny the Petitioner Medicaid eligibility, because she went into a nursing home, based upon assurances that she would be found eligible for Medicaid, but now must pay $10,000 in nursing home costs, because she was over the asset limit for Medicaid.

Petitioner’s arguments are equitable in nature, meaning they are not based upon what the law requires, but are instead based upon what the Petitioner believes is fair. However, Administrative Law Judges do not have equitable authority, but must instead follow the law as it is written.

Conclusions of Law

The agency correctly denied the Petitioner’s January 2017 application for Medicaid benefits, because the Petitioner was over the asset limit.

THEREFORE, it is

Ordered

That the petition is dismissed.

[Request for a rehearing and appeal to court instructions omitted.]