COA reverses denial of elderly man’s Medicaid application

An elderly man living in a nursing home was wrongly denied Medicaid benefits, the Indiana Court of Appeals ruled Tuesday, reversing a decision from the Indiana Family and Social Services Administration.

Randy Hotmer, born in 1948, entered a nursing home in April 2017 and shortly thereafter purchased two eight-year annuities. Hotmer’s application specified that the monthly payments would be made to his wife, but he was named in the contract as the annuities’ owner.

Then in October 2017, Hotmer applied for Medicaid benefits through FSSA, which determined that the monthly annuity payments put his income above the eligibility limit. An administrative law judge disagreed, noting the annuity payments were made solely to Hotmer’s wife.

After a series of reviews, the case reached the Clark Circuit Court, which agreed with FSSA that the annuities disqualified Hotmer from Medicaid. In overturning that denial, the appellate court noted Hotmer’s annuity contracts – which included the application stipulation that his wife receive the payments – “are irrevocable.”

“Consequently, Hotmer could not change the payee and make the payments available to him without breaching the contracts,” Judge Terry Crone wrote. “We therefore conclude that FSSA’s denial of Hotmer’s application for Medicaid benefits was arbitrary and capricious, and we reverse and remand for further proceedings consistent with this decision.”

Judge Robert Altice concurred in result without a separate opinion. The case is Randy L. Hotmer v. Indiana Family and Social Services Administration, 19A-PL-2694.

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