Rabin v. Wilson-Coker

362 F.3d 190, 2004 WL 596090
Court of Appeals for the Second Circuit·Decided March 26, 2004·No. No. 03-7572·Published·Cited by 32 cases

Opinion

POOLER, Circuit Judge.

Congress has determined that parents who receive Medicaid should enjoy a temporary grace period before having their benefits terminated when their earned income would otherwise make them ineligible. The question we face is whether the grace period only applies when the parent is fortunate enough to get a job or receive a salary increase that triggers ineligibility, or if the grace period also applies when a state lowers its income eligibility limits, making a working parent who has not received an increase in her salary ineligible.

The statute central to this appeal, 42 U.S.C. § 1396r-6, provides that families who were eligible for Aid to Families With Dependent Children (“AFDC”), a former welfare program, “in at least 3 of the 6 months immediately preceding the month in which such family becomes ineligible for such aid, because of hours of, or income from, employment of the caretaker relative,” will remain eligible for Medicaid for a period of up to a year. See 42 U.S.C. § 1396r~6(a)(l), (b)(1). Each of the individual plaintiffs has earned income and was terminated from Medicaid when Connecticut enacted a statute reducing its Medicaid eligibility limits. See 2003 Conn. Acts § 03-02 § 10(g) (Reg.Sess.). Connecticut contends that the transitional medical assistance (“TMA”) benefit is unavailable to plaintiffs because they lost their eligibility due to the new income limits and not due to income from employment. After reviewing the statutory scheme, the legislative history of the TMA provision and its purposes, and the relevant cases, we conclude that plaintiffs lost their eligibility for Medicaid because of “income from employment” within the [192]*192meaning of the federal statute and therefore remain eligible for TMA.

The Statutory Framework

Prior to April 1, 2003, Connecticut allowed families with income levels up to 150% of the federal poverty level to participate in HUSKY A, a state Medicaid program. Connecticut achieved this result by not counting income between its AFDC eligibility levels and 150% of the federal poverty level. In 2003, the Connecticut legislature enacted P.A. 03-02, which provided that parents and other needy caretaker relatives would not be eligible for TMA if their incomes exceeded 100% of the federal poverty level. 2003 Conn. Acts § 03-02 (Reg.Sess.). The legislature further directed that the Medicaid assistance for newly ineligible caretaker relatives would end on April 1, 2003.1 Id. Defendant Patricia Wilson-Coker, Commissioner of the Connecticut Department of Social Services, issued termination notices to approximately 23,000 adult Medicaid recipients informing them that their Medicaid benefits would end on April 1, 2003, because their household incomes exceeded 100% of the federal poverty level.

Connecticut’s actions took place against the background of a Byzantine tangle of federal statutes, any one of which is difficult to decipher if read either independently of the history of the program or in isolation from other provisions of the Medicaid Act. We therefore undertake a brief description and history of the Medicaid program, created in 1965.

Medicaid is a joint federal-state program under which the federal government pays a portion of a state’s expenses for providing medical assistance to persons who are unable to afford insurance provided that the state’s plan for granting assistance has been approved by the Centers for Medicare and Medicaid Services (“CMS”), a federal agency within the United States Department of Health and Human Services (“HHS”). Rodriguez v. City of N.Y., 197 F.3d 611, 613 (2d Cir.1999). In order to win approval from CMS, the state plan must comply with the requirements of the Medicaid Act, 42 U.S.C. § 1396 et seq., and its implementing regulations. Wisconsin Dep’t of Health and Family Servs. v. Blumer, 534 U.S. 473, 479, 122 S.Ct. 962, 151 L.Ed.2d 935 (2002).

Medicaid eligibility is categorical. To receive benefits, applicants must show both that they are needy and that they fall into one of the many categories set forth in 42 U.S.C. § 1396a(a)(10)(A). Until Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (“PRWORA”), two of the most significant eligibility categories were families who received AFDC, a cash assistance program for families with dependent children, and families with dependent children who would be eligible for AFDC if it were not for income and resources and who meet state income eligibility standards for Medicaid. See 42 U.S.C. §§ 1396a(a)(10)(A)(i)(I), 1396a(a)(10)(C), 1396d(a)(i),(ii).

PRWORA abolished the AFDC program and established a new cash assistance program for families, Temporary Assistance to Needy Families (“TANF”). See 42 U.S.C. § 601 et. seq. Nevertheless, Congress continued to define eligibility by reference to the former AFDC program. See 42 U.S.C. § 1396(a)(10)(A), (C). Congress resolved the apparent inconsistency of defining categorical eligibility by reference to the repealed AFDC program by enacting 42 U.S.C. § 1396u-l, which provides that [193]*193for purposes of PRWORA’s TMA provision, a person will “be treated as receiving aid or assistance” under AFDC, the repealed program, if she meets income and resource standards and other eligibility requirements in effect in 1996. 42 U.S.C. § 1396u-l(b)(l)(A). Congress also gave the states the option of creating either higher or lower income limits within the following parameters: (1) the income level could be no lower than the level in effect under the 1988 state plan; (2) income and resource levels could be increased “by a percentage that does not exceed the percentage increase in the Consumer Price Index for all urban consumers”; and (3) the states could change their methods for counting income and resources to make those methods “less restrictive” than the 1996 methods. 42 U.S.C. § 1396u-l(b)(2). As we have seen, Connecticut originally chose the third option and thereby created a generous program for its needy families.

The TMA program also has a long history. In 1972, Congress provided that families who became ineligible for AFDC due to “increased income from employment” would remain eligible for Medicaid for four months. Pub.L No. 92-603 § 209, 86 Stat. 1329 (1972) (codified as amended at 42 U.S.C. § 1396a(e)(l)(A)).

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Rabin v. Wilson-Coker, 362 F.3d 190, 2004 WL 596090 (2d Cir. 2004).

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