Many people ask about “spousal refusal” – the concept that a spouse may refuse to cooperate in the Medicaid long-term care application process by refusing to make their income and assets available for the care of their institutionalized spouse. In New York, a state where spousal refusal is legally available (also in Florida), the following recently occurred. A New York trial court entered judgment against a woman who refused to contribute to her spouse’s nursing home expenses, finding that because she had adequate resources to do so, an implied contract was created between her and the state entitling the state to repayment of Medicaid benefits it paid on the spouse’s behalf. Banks v. Gonzalez (N.Y. Sup. Ct., Pt. 5, No. 452318/15, Aug. 8, 2016).
Evelyn Gonzalez’ spouse was admitted to a nursing home and received $28,235.56 in Medicaid benefits from the Department of Social Services of the City of New York. At the time of her spouse’s Medicaid application, Ms. Gonzalez’ assets exceeded the community spouse resource allowance. However, she signed a declaration refusing to make her income or resources available to pay for her spouse’s care. After a letter to Ms. Gonzalez demanding repayment of the cost of Medicaid benefits paid on behalf of her spouse went unanswered, the agency filed suit. Ms. Gonzalez did not respond to the summons and complaint nor to the agency’s motion for default judgment. The Supreme Court of New York, New York County, granted the motion and entered default judgment against Ms. Gonzalez for the cost of benefits provided to her spouse. The court noted that in cases such as this where Ms. Gonzalez had the income and resources but refused to contribute to her spouse’s care, state law creates an implied contract between her and the state allowing recovery of the cost of the benefits provided during the preceding 10 years. Is this case a spousal refusal game changer?