Helped Uphold Use of Short-Term Medicaid Qualified Annuities. In Zahner v. Secretary, Pa. Dept. Of Human Services, the Third Circuit upheld the use of very short-term Medicaid qualified annuities as a permissible Medicaid eligibility strategy. In both cases, the annuities were used as part of a strategy to cover the cost of care during a period of ineligibility while getting “otherwise eligible” to start the penalty on gifts to adult children. This use of short term annuities is an alternative to “gift and return,” which is not available in Pennsylvania.