Schweiker v. Gray Panthers

453 U.S. 34, 101 S. Ct. 2633, 69 L. Ed. 2d 460, 1981 U.S. LEXIS 125, 49 U.S.L.W. 4792
Supreme Court of the United States·Decided June 25, 1981·No. 80-756·Published·Cited by 655 cases

Opinions

Justice Powell

delivered the opinion of the Court.

The Medicaid program provides federal funds to States that pay for medical treatment for the poor. An individual’s entitlement to Medicaid benefits depends on the financial resources “available” to him. Some States determine eligibility by assuming — “deeming”—that a portion of the spouse’s income is “available” to the applicant. “Deeming” thus has the effect of reducing both the number of eligible individuals and the amount of assistance paid to those who qualify. The question in this case is whether the federal regulations that permit States to “deem” income in this manner are arbitrary, capricious, or otherwise unlawful.

I

The Medicaid program, established in 1965 as Title XIX of the Social Security Act (Act), 79 Stat. 343, as amended, 42 U. S. C. § 1396 et seq. (1976 ed. and Supp. III), “provid[es] federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons.” Harris v. McRae, 448 U. S. 297, 301 (1980). Each participating State develops a plan containing “reasonable standards . . . for determining eligibility for and the extent of medical assistance.” 42 U. S. C. § 1396a (a) (17). An individual is entitled to Medicaid if he fulfills the criteria established by [37] the State in which he lives. State Medicaid plans must comply with requirements imposed both by the Act itself and by the Secretary of Health and Human Services (Secretary). See § 1396a (1976 ed. and Supp. III).

A

As originally enacted, Medicaid required participating States to provide medical assistance to “categorically needy” individuals who received cash payments under one of four welfare programs established elsewhere in the Act. See § 1396a (a) (10) (1970 ed.). The categorically needy were persons whom Congress considered especially deserving of public assistance because of family circumstances, age, or disability.1 States, if they wished, were permitted to offer assistance also to the “medically needy”- — persons lacking the ability to pay for medical expenses, but with incomes too large to qualify for categorical assistance. In either case, the Act required the States to base assessments of financial need only on “such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant or recipient.” § 1396a (a) (17) (B) (emphasis added). Specifically, eligibility decisions could “not take into account the financial responsibility of any individual for any applicant or recipient of assistance . .. unless such applicant or recipient is such individual’s spouse” or minor, blind, or disabled child. § 1396a (a) (17) (D).

Believing it reasonable to expect an applicant’s spouse to help pay medical expenses, some States adopted plans that considered the spouse’s income in determining Medicaid eligibility and benefits.2 These States calculated an amount [38] considered necessary to pay the basic living expenses of the spouse and “deemed” any of the spouse’s remaining income to be “available” to the applicant, even where the applicant was institutionalized and thus no longer living with the spouse.

B

In 1972, Congress replaced three of the four categorical assistance programs with a new program called Supplemental Security Income for the Aged, Blind, and Disabled (SSI), 42 U. S. C. § 1381 et seq., Pub. L. 92-603, 86 Stat. 1465.3 Under SSI, the Federal Government displaced the States by assuming responsibility for both funding payments and setting standards of need. In some States the number of individuals eligible for SSI assistance was significantly larger than the number eligible under the earlier, state-run categorical need programs.

The expansion of general welfare accomplished by SSI portended increased Medicaid obligations for some States because Congress retained the requirement that all recipients of categorical welfare assistance — now SSI — were entitled to Medicaid. Congress feared that these States would withdraw from the cooperative Medicaid program rather than expand their Medicaid coverage in a manner commensurate with the expansion of categorical assistance. “[I]n order not to impose a substantial fiscal burden on these States” or discourage them from participating, see S. Rep. No. 93-553, p. 56 (1973), Congress offered what has become known as the “§ 209 (b) option.” 4 Under it, States could elect to provide Medicaid as[39] sistance only to those individuals who would have been eligible under the state Medicaid plan in effect on January 1, 1972.5 States thus became either “SSI States” or “§ 209 (b) States” depending on the coverage that they offered.6

The Secretary promulgated regulations governing the administration of Medicaid benefits in both SSI States and § 209 (b) States. The regulations described the circumstances in which the income of one spouse may be “deemed” available to the other. In SSI States, “deeming” is conducted in the following manner: When the applicant and his spouse live in the same household, the spouse’s income and resources always are considered in determining eligibility, “whether or not they are actually contributed.” 42 CFR § 435.723 (b) (1980). When the applicant and spouse cease to share the [40] same household, the spouse’s income is disregarded the next month, § 435.723 (d), unless both are eligible for assistance. In the latter case, the income of both is considered for six months after their separation. § 435.723 (c).

Greater “deeming” is authorized in § 209 (b) States. The regulations require such States to “deem” income at least to the extent required in SSI States. § 435.734. And, if they choose, § 209 (b) States may “deem” to the full extent that they did before 1972. Ibid.7

II

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Schweiker v. Gray Panthers, 453 U.S. 34, 101 S. Ct. 2633, 69 L. Ed. 2d 460, 1981 U.S. LEXIS 125, 49 U.S.L.W. 4792 (1981).

453 U.S. 34 (Schweiker v. Gray Panthers) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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