New Hampshire SNT Case Hinges on Finding 35-Year-Old Medicaid Rules

The New Hampshire Supreme Court has put off the question of whether the state's Medicaid agency can consider payments from a special needs trust to be income until the state can locate its apparently lost Medicaid plan from 1972.

Emily Huff, a 21-year-old diagnosed with schizophrenia as a child, is the beneficiary of a $100,000 special needs trust to pay for things that public programs don't provide. When her mother and legal guardian applied for Medicaid on Emily's behalf, the New Hampshire's Department of Health and Human Services determined that certain trust expenditures counted as income that would delay Emily's eligibility for Medicaid coverage. The trust expenditures in question included tax payments, attorney's fees, a camp attended by Emily, a guardianship bond, and expenses for a trip by Emily to Wisconsin.

Under federal Medicaid rules, such trust expenditures would not count as income, but New Hampshire is one of 11 states that made a deal with the government 35 years ago: They could make their own rules as long as the rules were no stricter than those in effect and approved by the federal government on January 1, 1972. However, state Medicaid officials could not locate the state's Medicaid plan from 1972 to prove that their rules were no stricter than those in place then, so a hearing officer ruled against Emily using state trust rules instead. Emily appealed, arguing that the Department could not use the state rules and had to produce the state's Medicaid rules approved by the federal government in 1972.

The Supreme Court of New Hampshire agreed with Emily. The court sent the case back so that a determination can be made based on the 1972 rules. If those rules cannot be found, it looks as though the state Medicaid agency will have to follow current federal rules, which say money in special needs trusts can't be counted as income unless spent on food or shelter.

To read the court's decision, which is titled Appeal of Emily Huff (N.H., No. 2005-856, Nov. 28, 2006), Click on: https://caselaw.lp.findlaw.com/data2/newhampshirestatecases/0611/huff135.pdf.
(If you do not have the free PDF reader installed on your computer, download it here.)

For an article in the Concord Monitor on the case, click here.