MARY PALOMBA-BOURKE v. COMMISSIONER OF SOCIAL SERVICES, SC 19044

Judicial District of New Britain

 Medicaid; Spousal Eligibility Rules; Whether Trust Benefitting Plaintiff was Properly Deemed an Asset of her Spouse Pursuant to Eligibility Provisions of Medicaid Catastrophic Coverage Act of 1988 Where Trust was Created Before Effective Date of Act. The plaintiff’s first husband created a testamentary trust in 1968 for the benefit of the plaintiff and their children.  Following her husband’s death in 1976, the plaintiff married Daniel Bourke.  In 2009, Bourke applied for Medicaid benefits to cover his expenses for nursing home care.  The Medicaid Catastrophic Coverage Act of 1988 (MCCA) provides that the combined assets of both an institutionalized spouse and the spouse living in the community “shall be considered to be available to the institutionalized spouse.”  The department of social services (department) deemed the trust assets available to Bourke and denied his application, finding that he and his wife’s combined assets exceeded the limit for Medicaid eligibility.  The plaintiff appealed to the trial court, claiming that the Medicaid eligibility rules in effect when the trust was created—which looked only to the assets of the institutionalized spouse in determining eligibility—should have applied here such that the trust assets should not have been counted.  The plaintiff contended that subjecting the trust to the provisions of the MCCA affected the rights of the intended beneficiaries in a way wholly unanticipated by the trust creator, thereby thwarting his intent.  The trial court affirmed the department’s decision, relying on the general rule that one applying for Medicaid benefits is subject to the rules governing Medicaid eligibility in effect at the time of the application.  The Supreme Court will now review the trial court’s decision.