Community Spouse transfers assets into annuity using "loophole", burden shifted to taxpayers
Common Law Court of PA in the case of Ross v. Department of Public Welfare, 936 A.2d 552(2007)
Held that a community spouse could take jointly owned marital assets and transfer those into a Medicare qualified single premium immediate annuity which effectively eliminates the funds as an asset that can be used for the institutionalized spouse in the nursing home. The Department Of Public Welfare contended that this conversion of community property effectively shifted the burden of paying for the institutionalized spouse from her assets to the taxpayers. While the court expressed sympathy for this legal point of view, it held that the transfer was permitted by a “loophole” in the social security law regulating eligibility for Medicare benefits.