John Geston, the petitioner in the case, needed aid to cover the costs of a nursing home so he applied to receive Medicaid benefits. Greston’s wife, needing a monthly income as well, purchased an annuity to provide her with $ 2,734.65 a month. This brought the couple’s monthly income within Medicaid’s limitations. However, the state refused to grant their application and claimed that, because under state law the annuity is a countable asset, the couple did not meet Medicaid requirements. The state law places further limitations on the monthly maintenance requirements. In addition to the federal limitations, the state law states that the combined income of the spouses cannot exceed 150% of the federal monthly limitation. While the Gestons met the first requirement, they failed the second requirement.
In Geston v. Olson, the federal court held that because the state law was more restrictive than the federal law, it was invalid.
See U.S. Court Strikes Down N.D. Law Placing Ceiling On Spouses Annuity Income, ElderLawAnswers, May 7, 2012.
