High court calls for study of Medicaid-trust rules

Decision calls into question whether the rules were actually established

Saying the matter requires further study, the New Hampshire Supreme Court has overturned a decision by the state Department of Health and Human Services that denied Medicaid for a mentally ill woman with a $100,000 trust fund.

The court, in its Nov. 28 ruling, noted that both lawyers for the state and for the woman cited portions of regulations, rules and manuals that allegedly existed years ago without submitting the actual plans. The court also noted that a hearings officer’s decision on the matter was “silent” about how she reconciled federal law with state requirements.

The trust was established for Emily Huff of Concord after her father died in 2000. Emily was diagnosed with schizophrenia as a child. Her mother, Anne Huff, said she wants her daughter to have money for such items as plane tickets to visit family or to buy furniture for her first apartment.

But the state says Emily can’t have the trust and still get medical care through the state-federal Medicaid program for the poor.

The state asked for the case to be dismissed, arguing the issue is whether it was wrong to deny the Medicaid benefits, not whether state trust rules are valid. The state says Emily should challenge the rules in Superior Court.

Federal guidelines created in 1993 say people who can’t work because of a disability can spend their trust on whatever they want, as long as it’s not food or shelter, without having to count the money as “income.” Because Medicaid is a needs-based program, people who have income beyond set standards don’t qualify for medical services.

The attorney general’s office argued that New Hampshire has permission to be stricter than federal rules allow because of an option Congress offered to states in 1972. Under the option, New Hampshire can set up its own Medicaid eligibility standards as long as they’re not more restrictive than the standards in place 34 years ago.

Before 1972, the attorney general’s office said, money spent from trusts was considered income when determining whether a person was eligible for public assistance.

However, Emily’s lawyer, Jan Myskowski, argued that there is no evidence the old policy was ever approved by the federal government. In order to set up its own Medicaid eligibility standards, New Hampshire must have had an approved plan in place before 1972, according to federal law.

The state Supreme Court said neither side has submitted the actual, approved plan from the time and that it must be made a part of the record, saying that “further proceedings may also be necessary” if the state determines that such a plan can’t be produced.