Lopes v. Department of Social Services
2012 U.S. App. LEXIS 20535
| 2d Cir. | 2012Background
- Institutionalized spouse Lopes applies for Medicaid; district denies based on annuity payments to spouse being a resource; Lopes argues anti-assignment annuity is income not a countable resource.
- Annuity purchased immediately before application; Assignment Limitation Rider prohibits transfer or assignment; payments fixed at $2,340.83 for ~6 years.
- State policy UP M § 4030.47 treats income from annuities as available assets; district court held this too restrictive versus SSI rules.
- Regulations differentiate income vs. resources by right to liquidate; non-assignable annuity lacks such right and is treated as income under SSI guidance; district court granted Lopes summary judgment.
- Appellate court (Second Circuit) affirms, adopting Lopes’s interpretation that non-assignable annuity payments are income, not a resource, under SSI rules and POMS guidance; HHS amicus supports this view.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a non-assignable annuity payment stream is income or a resource. | Lopes: income. | State: resource via potential sale; liquidable form. | Income, not a resource. |
| Whether POMS SI 01110.15 is entitled to deference in classifying the annuity as income. | POMS supports income classification. | Narrow reading of regulation limits deference. | POMS deference appropriate; supports income ruling. |
| Whether HHS amicus guidance supports Lopes’s interpretation. | HHS guidance favors income classification. | State argues contrary interpretations. | Yes; HHS guidance persuasive in favor of income. |
Key Cases Cited
- Rumbin v. Utica Mut. Ins. Co., 757 A.2d 526 (Conn. 2000) (assignment provisions affect right to assign but may be voided by explicit language)
- James v. Richman, 547 F.3d 214 (3d Cir. 2008) (non-assignable annuity payments treated as income, not assets)
- Morris v. Okla. Dep’t of Human Servs., 685 F.3d 925 (10th Cir. 2012) (non-assignable annuity payments constitute income)
- Hutcherson v. Ariz. Health Care Cost Containment Sys. Admin., 667 F.3d 1066 (9th Cir. 2012) (recognizes treatment of annuities to convert assets to income for spouse)