Vaughn v. Sullivan

906 F. Supp. 466, 1995 U.S. Dist. LEXIS 15885, 1995 WL 631672
CourtDistrict Court, S.D. Indiana
DecidedOctober 19, 1995
DocketIP 93-1600 C B/S
StatusPublished
Cited by7 cases

This text of 906 F. Supp. 466 (Vaughn v. Sullivan) is published on Counsel Stack Legal Research, covering District Court, S.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vaughn v. Sullivan, 906 F. Supp. 466, 1995 U.S. Dist. LEXIS 15885, 1995 WL 631672 (S.D. Ind. 1995).

Opinion

ENTRY

BARKER, Chief Judge.

This case involves a challenge to the way the State of Indiana administers plans to achieve self support (“PASS” or “PASS plans”) and the Medicaid Act. As will be discussed in more detail below, participation in a PASS allows a disabled individual to earn “extra” income without necessarily disqualifying him or her from receiving other government-provided benefits. The State of Indiana excludes PASS income from consideration in determining Medicaid eligibility only if the disabled person is blind. Plaintiffs bring this class action because the State does not extend this benefit to sighted disabled persons.

I. FACTUAL BACKGROUND.

A. Statutory Framework

The Medicaid program was established in 1965 as a way for the states and the federal government to provide medical assistance to the needy. Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. As originally enacted, Medicaid required participating states to provide medical assistance to individuals who received cash payments under four joint federal/state welfare programs administered by the states. In 1972 Congress replaced three of the four programs with a new federal program, Supplemental Security Income for the Aged, Blind, and Disabled (“SSI”), 42 U.S.C. § 1381 et seq.; see generally, Herweg v. Ray, 455 U.S. 265, 102 S.Ct. 1059, 71 L.Ed.2d 137 (1982); Schweiker v. Gray Panthers, 453 U.S. 34, 101 S.Ct. 2633, 69 L.Ed.2d 460 (1981).

The establishment of SSI increased the number of individuals previously ineligible for assistance under the state programs. Fearing that many states would leave the Medicaid program rather than expand their Medicaid coverage, Congress enacted 42 U.S.C. § 1396a(f), which has become known as the section 209(b) option. 1 Herweg, 455 U.S. at 268, 102 S.Ct. at 1063. The section 209(b) option permits states to use Medicaid eligibility requirements for the blind, aged and disabled that are more restrictive than the eligibility requirements used by the federal government to determine SSI eligibility. However, section 209(b) prohibits states from imposing stricter eligibility standards than those in place on January 1,1972. Mattingly v. Heckler, 784 F.2d 258, 262 n. 3 (7th Cir. 1986) (section 209(b) state can elect to provide Medicaid assistance only to “those individuals who met the eligibility requirements for the state administered programs on January 1, 1972, rather than determining Medicaid eligibility according to the standards of the new SSI program”). The State of Indiana has elected to be a section 209(b) state.

One of the objectives of the SSI program is to supply “[ijncentives and opportunities *469 for those able to work or to be rehabilitated that will enable them to escape from their dependent situations.” Panzarino v. Heckler, 624 F.Supp. 350, 358 (S.D.N.Y.1985) (quoting H.Rep. 92-231, 1972 U.S.C.C.A.N. 4989, 5133). The PASS program was conceived as one method of doing so. As its name implies, PASS exclusions are intended to expand opportunities for recipients of SSI to “become self-supporting by permitting them to set aside income or resources for a specific occupational goal, such as education, training or purchase of work-related equipment, without losing eligibility for or entitlement to SSI benefits.” Waterflow v. Gallant, 767 F.Supp. 393, 394 (D.Mass.1991). As a result, SSI recipients who are approved to participate in a PASS are permitted to take jobs and earn income without losing their SSI benefits. 42 U.S.C. §§ 1382a(b)(4) and 1382b(a)(4). 2

Indiana’s Medicaid program treats blind and sighted PASS participants differently. Blind recipients, for example, can have income earned under an approved PASS plan disregarded for a period of up to twelve months. 3 Blind PASS participants are also exempted from Indiana’s Medicaid resource limitations. 405 IAC 2-3-15(c)(9). There are no similar exemptions for sighted disabled PASS participants. As a result, a sighted PASS participant must incur a “spend down” in order to maintain eligibility under the Indiana Medicaid plan, thus requiring the recipient to pay her medical bills until the excess income above the resource limit is spent. 405 IAC 2-3-10.

B. The Named Plaintiffs

Plaintiff Matt Ravin suffers from chronic multiple sclerosis (“MS”). Because he has no control over his legs and cannot use his hands, he has been confined to a wheelchair. He cannot feed himself and needs an aide to assist him in getting up in the morning and into bed at night. Although he is totally disabled, he is not blind or visually impaired.

Mr. Ravin has been earning Social Security Disability benefits totaling $626 per month. This amount is greater than the maximum monthly income limit for Medicaid. Thus, Mr. Ravin has a monthly spend down of $164 per month, which is to say he must spend that much per month on medical expenses before he is eligible for Medicaid benefits. He has never had difficulty meeting this spend down requirement, however, because his medical expenses are so high.

Effective April 1, 1994, the Social Security Administration approved Mr. Ravin’s proposed PASS, thus allowing him to set aside income for an occupational objective. Pursuant to his PASS, income of up to $1294.98 was excludable for purposes of determining his SSI eligibility. As a result, Mr. Ravin became eligible for $446 in monthly SSI benefits retroactive to April. He keeps these monies in a separate savings account where they are accumulating so that he can purchase a handicapped-accessible van.

*470 On November 21, 1994, Mr. Ravin began working part time as a community relations officer for a company doing work for Metro Bus of Indianapolis. He places all of his wages of $250 per week (gross) into his PASS account. His PASS plan has been adjusted by the SSA to exclude from consideration for purposes of determining his SSI eligibility all income he anticipates receiving from this employment.

Prior to his participation in the PASS program, Mr. Ravin was required to spend down $164 per month to remain eligible for state Medicaid benefits. Despite the approval of his PASS, this spend down requirement has not changed. Moreover, as a result of his three sources of income — SSI, disability and wages — Mr. Ravin is now ineligible for Medicaid benefits because his monthly resources exceed that program’s $1500 monthly resource limit.

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Bluebook (online)
906 F. Supp. 466, 1995 U.S. Dist. LEXIS 15885, 1995 WL 631672, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vaughn-v-sullivan-insd-1995.