Striegel v. South Dakota Dept. of Social Services, No. 18480

• Court: Supreme Court of South Dakota
• Writing for the Court: HENDERSON; MILLER
• Citation: 44 Soc.Sec.Rep.Ser. 377,515 N.W.2d 245
• Parties: , Medicare & Medicaid Guide P 42,430 William STRIEGEL, Appellant, v. SOUTH DAKOTA DEPARTMENT OF SOCIAL SERVICES, Appellee.
• Decision Date: 20 April 1994
• Docket Number: No. 18480

Page 245

515 N.W.2d 245 44 Soc.Sec.Rep.Ser. 377, Medicare & Medicaid Guide
P 42,430 William STRIEGEL, Appellant,
v.
SOUTH DAKOTA DEPARTMENT OF SOCIAL SERVICES, Appellee. No. 18480. Supreme Court of South Dakota. Argued Feb. 14, 1994.
Decided April 20, 1994.

Dennis H. Hill of Costello, Porter, Hill, Heisterkamp & Bushnell, Rapid City, for plaintiff and appellant.

Mark W. Barnett, Atty. Gen., Joan P. Baker, Asst. Atty. Gen., Pierre, for defendant and appellee.

HENDERSON, Justice.

PROCEDURAL HISTORY/ISSUE

This is a case of first impression in South Dakota.

After the South Dakota Department of Social Services (DSS) rejected his application for Medicaid, appellant William Striegel (William) received an "Administrative Fair Hearing" on July 8, 1992. The hearing examiner upheld appellee DSS' decision, as did the trial court on appeal. William asks on appeal to this Court if his trust is available for his use and thereby, a Medicaid Qualifying trust (MQT) which disqualifies him from receiving Medicaid? We find that William is the beneficiary of a MQT. We affirm.

Page 246

FACTS

When he was born in 1946, William suffered brain damage and never progressed beyond the mental age of 3 1/2; he is mentally incompetent. Since 1968, this Elgin, North Dakota native has been a resident of the Black Hills Workshop, an institution for the mentally handicapped, in Rapid City. His father died intestate that same year, and William inherited approximately $5,400 in cash and 240 acres of land in North Dakota. Thereafter, a North Dakota court appointed William's mother, Ida, as his guardian.

Although Ida kept a record of William's assets, she did not submit any accounting report until asked for one in 1991. According to her report to the North Dakota court, which covered 1969 through 1990, William's fiscal resources included land rentals and sales ¹, gas and oil lease payments, interest, Social Security ($278.00/month), and his earnings at the Black Hills Workshop (less than $50.00/month) for a total of $51,853.43. ² In July of 1992, that amount had fallen to $37,473.95.

In 1991, a North Dakota court, apparently at the request of William's family, approved the placing of the guardianship funds into a trust, naming Ida as both settlor and trustee with William as beneficiary. Under the trust, any expenditures made by the trustee were to be used solely for the purpose of providing William with services not provided by his residential facility or by any governmental unit. Upon William's death, the trust remainder passes to his brother, Tom. Because of his access to this trust, DSS ruled William ineligible for Medicaid. We agree.

DECISION

This Court now decides if an inter vivos discretionary trust fund is, according to statute, an "available" asset which would disqualify William from receiving Medicaid. Our review is de novo and is confined to a question of law. It is not in any way restricted or controlled by the agency's ruling or the circuit court's decision. Northwestern Bell v. PUC, 467 N.W.2d 468, 469 (S.D.1991); SDCL 1-26-37.

Medicaid is a federal program administered by the states and provides medical financial assistance to needy persons whose income and resources are insufficient to meet the expenses of health care. Harris v. McRae, 448 U.S. 297, 301, 100 S.Ct. 2671, 2680, 65 L.Ed.2d 784 (1980). In determining eligibility for this program, per 42 U.S.C. Sec. 1396a(a)(17), states are required to assess financial need only on resources available to the individual:

A state plan for medical assistance must ... include reasonable standards ... for determining eligibility for and the extent of medical assistance under the plan which ... provide for taking into account only such income and resources as are, as determined in accordance with standards prescribed by the [Secretary of Health and Human Services], available to the applicant or recipient[.]

42 U.S.C. Sec. 1396a(a)(17). Federal regulations state, "[R]esources are considered available both when actually available and when the applicant or recipient has a legal interest in a liquidated sum and has the legal ability to make such sum available for support and maintenance." Missouri Div. of Family Serv. v. Wilson, 849 S.W.2d 104, 107 (Mo.App.1993) (citing 45 C.F.R. Sec. 233.20(a)(3)(ii)(D)).

Should an applicant be the beneficiary of a MQT, as defined by 42 U.S.C. Sec. 1396a(k)(2), the applicant is deemed to have available resources which exclude him from Medicaid coverage.

For purposes of this subsection, a "medicaid qualifying trust" is a trust, or...