Soskin v. Reinertson

• Decision Date: 12 January 2004
• Docket Number: No. 03-1162.,03-1162.
• Citation: 353 F.3d 1242
• Parties: Valentin SOSKIN, Bei Dei Howe, Eva Rosenthal, Vatchagan Tatevosian, Ginda K. Gelfand, Yakov Gelfand, Dubale Shibeshi, Sarin Perlman, on their own behalf and on behalf of all others similarly situated, Plaintiffs-Appellants, v. Karen REINERTSON, in her official capacity as Executive Director of the Colorado Department of Health Care Policy and Financing, Defendant-Appellee. United States of America, Intervenor.
• Court: U.S. Court of Appeals — Tenth Circuit

353 F.3d 1242

Valentin SOSKIN, Bei Dei Howe, Eva Rosenthal, Vatchagan Tatevosian, Ginda K. Gelfand, Yakov Gelfand, Dubale Shibeshi, Sarin Perlman, on their own behalf and on behalf of all others similarly situated, Plaintiffs-Appellants, v. Karen REINERTSON, in her official capacity as Executive Director of the Colorado Department of Health Care Policy and Financing, Defendant-Appellee.

United States of America, Intervenor.

No. 03-1162.

United States Court of Appeals, Tenth Circuit.

January 12, 2004.

Lucas Guttentag, American Civil Liberties Union, Immigrants' Rights Project, Oakland, CA; Marc Cohan, Welfare Law Center, Inc., New York, N.Y. (Mary R. Mannix, Anne H. Pearson, and Rebecca L. Scharf, Welfare Law Center, Inc., New York, NY; Mark Silverstein, American Civil Liberties Union Foundation of Colorado, Denver, CO; Gregory Piché, Scott Barker and Stephen Masciocchi, Holland & Hart LLP, Denver, CO; Linton Joaquin and Gabrielle Lessard, National Immigration Law Center, Los Angeles, California; Tanya Broder, National Immigration Law Center, Oakland, CA; Jane Perkins, National

Health Law Program, Chapel Hill, NC, with them on the briefs), for Plaintiffs-Appellants.

Terence P. (Renny) Fagan, Deputy Attorney General (Ken Salazar, Attorney General, Ann Hause, First Assistant Attorney General, and Ilene I. Wolf Moore, Assistant Attorney General, with him on the briefs), Denver, CO, for Defendant-Appellee.

Robert D. McCallum, Jr., Assistant Attorney General; John W. Suthers, United States Attorney, Denver, Colorado; Thomas M. Bondy and Eric D. Miller, Attorneys, Appellate Staff Civil Division, United States Department of Justice, Washington, D.C., on the brief for Intervenor.

Before KELLY, HENRY, and HARTZ, Circuit Judges.

HARTZ, Circuit Judge.

Plaintiffs represent a class of legal aliens who will lose their Medicaid benefits when last year's Colorado Senate Bill 03-176 (SB 03-176) takes effect. They contend that the eligibility requirements of SB 03-176 violate the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution, and that the state's procedures for terminating benefits violate Medicaid law and the Due Process Clause of the Fourteenth Amendment. The district court denied Plaintiffs' motion for a preliminary injunction against implementation of SB 03-176. We granted an injunction pending resolution of this appeal. We now reject Plaintiffs' contentions except that we agree that the state's procedures violate the Medicaid Act in denying some members of the class a right to a hearing. Accordingly, we vacate our injunction, and we affirm in part and reverse in part the district court's denial of a preliminary injunction.

I. BACKGROUND

A. Medicaid

Prior to the enactment of SB 03-176, which was signed into law on March 5, 2003, and scheduled to take effect on April 1, 2003, Colorado provided optional Medicaid coverage to all legal aliens eligible under federal law to receive such coverage. The new statute would repeal optional Medicaid coverage, terminating Medicaid benefits to approximately 3,500 aliens residing in Colorado.

Medicaid is a joint state and federal medical assistance program for the poor, disabled, and others in need. 42 U.S.C. § 1396 et seq. It provides coverage for such medical services as inpatient and out-patient hospital care, physicians' services, prescriptions, home health care services, and nursing home care. Id. §§ 1396a(a)(10)(A), 1396d(a)(1)-(5), (17) & (20). Although states are not required to participate in Medicaid, if a state does elect to participate, it must comply with the minimum requirements of the federal Medicaid Act in order to receive federal matching funds. See Wilder v. Va. Hosp. Ass'n, 496 U.S. 498, 502, 110 S.Ct. 2510, 110 L.Ed.2d 455 (1990). States implement their Medicaid programs in accordance with comprehensive written plans that must be submitted to and approved by the Secretary of the United States Department of Health and Human Services. See 42 U.S.C. § 1396. Colorado has opted to participate in the Medicaid program, and has designated the Department of Health Care Policy and Financing (the Colorado Department), currently headed by Defendant Karen Reinertson (sued here in her official capacity), as the single state agency responsible for administering Medicaid. See Colo.Rev.Stat. § 26-4-104(1).

Federal law requires participating states to provide full Medicaid services to all individuals designated as categorically needy. 42 U.S.C. § 1396a(a)(10)(A)(i). States have discretion to provide full Medicaid coverage to additional "optional" segments of the population. Id. § 1396a(a)(10)(A)(ii). Emergency care must be provided to all individuals in need of such services. 8 U.S.C. § 1611(b)(1)(A).

In 1996 Medicaid law changed significantly. The federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), Pub.L. No. 104-193, 110 Stat. 2105 (1996) (often referred to as the Welfare Reform Act), was enacted. Explaining the purpose of the provisions with respect to aliens, the Act states:

The Congress makes the following statements concerning national policy with respect to welfare and immigration:

(1) Self-sufficiency has been a basic principle of United States immigration law since this country's earliest immigration statutes.

(2) It continues to be the immigration policy of the United States that —

(A) aliens within the Nation's borders not depend on public resources to meet their needs, but rather rely on their own capabilities and the resources of their families, their sponsors, and private organizations, and

(B) the availability of public benefits not constitute an incentive for immigration to the United States.

(3) Despite the principle of self-sufficiency, aliens have been applying for and receiving public benefits from Federal, State, and local governments at increasing rates.

(4) Current eligibility rules for public assistance and unenforceable financial support agreements have proved wholly incapable of assuring that individual aliens not burden the public benefits system.

(5) It is a compelling government interest to enact new rules for eligibility and sponsorship agreements in order to assure that aliens be self-reliant in accordance with national immigration policy.

(6) It is a compelling government interest to remove the incentive for illegal immigration provided by the availability of public benefits.

(7) With respect to the State authority to make determinations concerning the eligibility of qualified aliens for public benefits in this chapter, a State that chooses to follow the Federal classification in determining the eligibility of such aliens for public assistance shall be considered to have chosen the least restrictive means available for achieving the compelling governmental interest of assuring that aliens be self-reliant in accordance with national immigration policy.

8 U.S.C. § 1601(1)-(7).

The PRWORA imposes several limitations on the availability of Medicaid benefits to aliens. 8 U.S.C. § 1601 et seq; id. § 1612(b)(3)(C). Prior to the PRWORA, Medicaid benefits were mandated for otherwise qualified aliens who were lawfully admitted for permanent residence or otherwise permanently residing in the United States. See 42 C.F.R. § 435.406(a) (1990). Now, the PRWORA requires states to provide Medicaid coverage only to "qualified aliens," which it defines as lawful permanent residents, refugees, aliens granted asylum, and certain other specified categories of lawfully present aliens. 8 U.S.C. § 1612(b); id. § 1641(b). The PRWORA also provides that most of these qualified aliens are ineligible for Medicaid benefits until they have lived in the United States for at least five years. Id. § 1613. But the five-year requirement does not apply to certain qualified aliens, such as lawful permanent residents who have worked in the United States for 40 qualifying quarters, veterans, and active-duty members of the military. Id. § 1612(b)(2). Nor does the requirement apply to qualified aliens who entered the United States prior to August 22, 1996. Id. § 1613(a).

The PRWORA does, however, allow states to provide optional Medicaid coverage to legal aliens not included within Congress's definition of "qualified aliens." Id. § 1612(b). In essence, states may redefine "qualified aliens" to cover additional legal aliens, so long as they do not cover those aliens explicitly excluded by the PRWORA (e.g., most aliens who have not lived in the United States for five years). Id.

Initially Colorado opted to provide coverage beyond that mandated by the PRWORA. In 1997 Colorado responded to the PRWORA by enacting legislation that maintained the optional Medicaid coverage it had previously provided to all lawfully present aliens who were otherwise eligible. See 1997 Colo. Sess. Laws 1257-58. But Colorado policy changed in March of 2003. Faced with an enormous budget shortfall, the state looked to its Medicaid program for savings. The Colorado legislature passed and the governor signed SB 03-176, which removed the optional Medicaid coverage Colorado had been providing to legal aliens. SB 03-176 § 1. After SB 03-176 takes effect, only those aliens that Congress defined in the PRWORA as "qualified aliens" will be eligible for Medicaid in Colorado. SB 03-176 § 2; Colo. Rev.Stat. § 26-4-201(2)(a)-(b). The state estimates that it will save $5.9 million annually by eliminating optional alien coverage.

B. Coverage Termination Procedures

In Colorado the county departments of social services make the initial Medicaid eligibility determinations. Colo.Rev.Stat. § 26-4-106(1)(a). Accordingly, in anticipation of enactment of SB 03-176, the Colorado Department notified the state's 64 counties of the impending Medicaid eligibility changes and instructed them on procedures to use in effectuating those changes.

First, the Department sent the counties two letters, informing them that SB 03-176 was moving...