- Associated Press - Friday, June 6, 2014

HARTFORD, Conn. (AP) - Connecticut officials can reject Medicaid coverage for nursing home patients if their spouses have trusts funds, no matter if those funds predated the marriage and were never intended to benefit the patients, the state Supreme Court ruled Friday.

The 6-0 decision comes as many couples worry about losing a good portion of their assets before qualifying for Medicaid coverage for nursing home care.

The ruling came in the case of Mary Palomba-Bourke, whose husband, Daniel Bourke of Somers, applied for Medicaid in 2009 after spending most of his money for nursing home care. But the Department of Social Services determined he wasn’t eligible because his wife had a trust fund containing more than $500,000.

The high court ruled that the department was justified in rejecting Medicaid coverage in 2010 for Bourke, who died later that year.

Lawyers for his wife argued the fund was set up in 1968 by her first husband, who died in 1976, and was established to provide for the well-being of her and their children. The attorneys, Jeffrey Lindequist and Scott Storms, said Bourke’s first husband, Edward Palomba, never intended the funds to be drained to pay for the care of his wife’s future husband.

Lindequist and Storms also said the trust fund predated changes made to the federal Medicaid Act in 1988 that allowed spouses’ assets to be considered in Medicaid applications. They believe Connecticut law requires the Social Services Department to determine Medicaid applicants’ assets based on the rules that were in effect when trusts were created.

In a brief to the Supreme Court, Lindequist wrote that it was unfair to apply the 1988 law changes to Palomba-Bourke’s trust fund.

“Rather than allow the trust to continue to function as intended, to provide for his widow and children following his death, the (1988 law change) would funnel this asset away from its intended beneficiaries to a person who Mr. Palomba never meant to benefit from this asset,” the brief said.

Justices rejected those arguments, saying current law allows the state to consider a spouse’s assets.

Messages seeking comment were left Friday for Lindequist and Storms. No one answered the phone at Palomba-Bourke’s home Friday.

The Medicaid law does have a section designed to keep husbands and wives from going completely broke before their spouses qualify for coverage. Under those rules, Daniel Bourke could have been covered by Medicaid after he and his wife’s assets dropped below about $110,000, the Supreme Court said.

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