Morris v. Oklahoma Department of Human Services

Glenda Morris (plaintiff) applied for long-term care Medicaid benefits through the Oklahoma Department of Human Services (OKDHS) (defendant). OKDHS denied Glenda’s first Medicaid application, finding that Glenda’s assets exceeded Oklahoma’s $2,000 Medicaid asset limit. Collectively, Glenda and her husband, Leroy Morris (defendant), had over $100,000 in assets. Accordingly, OKDHS set Leroy’s community spouse resource allowance (CSRA) at approximately $50,000, leaving Glenda with about $50,000 in assets subject to the Medicaid asset limit. To spend down assets, Glenda purchased two burial contracts and a $41,000 nontransferable, nonsaleable annuity solely benefitting Leroy. Then, Glenda applied again for Medicaid benefits. OKDHS denied Glenda’s second application, and Glenda requested a hearing. The OKDHS Appeals Committee affirmed the denial, holding that (1) the $41,000 annuity counted toward Glenda’s Medicaid asset limit because it was purchased with Glenda’s assets; and (2) even if the annuity did not count toward Glenda’s Medicaid asset limit, it was subject to a transfer penalty because it was an interspousal asset transfer that brought Leroy’s assets above his CSRA limit. The Morrises appealed to federal district court. The district court affirmed, holding a community spouse could not acquire an annuity in excess of their CSRA after the institutionalized spouse’s initial Medicaid eligibility determination. The Morrises appealed.