453 U.S. 34 (1981), 80, Schweiker v. Gray Panthers

Docket Nº:No. 80 756
Citation:453 U.S. 34, 101 S.Ct. 2633, 69 L.Ed.2d 460
Party Name:Schweiker v. Gray Panthers
Case Date:June 25, 1981
Court:United States Supreme Court

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453 U.S. 34 (1981)

101 S.Ct. 2633, 69 L.Ed.2d 460



Gray Panthers

No. 80 756

United States Supreme Court

June 25, 1981

Argued April 29, 1981




The Medicaid program provides federal funds to States that pay for medical treatment for needy persons. Section 1902(a)(17)(D) of the Social Security Act provides that, in calculating benefits, state Medicaid plans must not

take into account the financial responsibility of any individual for any applicant or recipient of assistance under the plan unless such applicant or recipient is such individual's spouse

or minor, blind, or disabled child. Section 1902(a)(17)(B) requires participating States to grant benefits to eligible persons taking into account only such income and resources that are, "as determined in accordance with standards prescribed by the Secretary [of Health and Human Services], available to the applicant." The Secretary promulgated regulations describing the circumstances in which the income of one spouse may be "deemed" available to the other for purposes of determining eligibility for Medicaid benefits. In States participating in the program called Supplemental Security Income for the Aged, Blind, and Disabled (SSI), which substantially replaced the former state-run categorical need plans and enlarged eligibility for Medicaid benefits, the regulations provide that, when the applicant and his spouse live in the same household, the spouse's income and resources always must be considered in determining eligibility whether or not they are actually contributed, and that, when the applicant and spouse cease to share the same household, the spouse's income will be disregarded the next month unless both are eligible for assistance, in which case the income of both is considered for six months. Greater "deeming" is authorized in States which have exercised the option under § 209(b) of the 1972 amendments to the Social Security Act of electing not to enlarge Medicaid eligibility to SSI levels. Respondent, an organization dedicated to helping the elderly, filed suit in Federal District Court attacking the regulations applicable in the § 209(b) States on the ground that "deeming" impermissibly employs an "arbitrary formula" to impute a spouse's income to an institutionalized applicant, and thus is inconsistent with § 1902(a)(17)(B). Respondent claimed that, before a State may take into account the spouse's income in calculating an institutionalized applicant's benefits, it must

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make a factual determination that the spouse's income actually is contributed to that applicant. The District Court agreed, and declared the regulations invalid. The Court of Appeals affirmed, but on the ground that the regulations were invalid because the Secretary, in promulgating them, had failed to consider the unfairness of treating separated spouses as a "single economic unit" and the disruption caused by the requirement of support from the applicant's spouse.

Held: The regulations at issue are consistent with the statutory scheme, and are reasonable exercises of the authority delegated to the Secretary. Pp. 43-50.

(a) In view of the explicit delegation of substantive authority to the Secretary in [101 S.Ct. 2636] § 1902(a)(17)(B), his definition of the term "available" is entitled to "legislative effect," rather than mere deference or weight. Pp. 43-44.

(b) The language of § 1902(a)(17)(D), which was enacted as part of the original Medicaid program, makes it clear that, from the beginning of the program, Congress authorized States to presume spousal support. And this provision's legislative history is fully consistent with its language. By enacting § 209(b), Congress in effect told States that wished to use the § 209(b) option that they could retain virtually all of the Medicaid eligibility limitations, including "deeming," that were allowed under the original Act. Pp. 44-47.

(c) In treating spouses differently from most other relatives by explicitly authorizing state plans "to take into account the financial responsibility" of the spouse, Congress demonstrated that "deeming" is not antithetical to the general statutory requirement that Medicaid eligibility be based solely on resources "available" to the applicant. "Available" resources are different from those in hand. The requirement of availability refers to resources left to a couple after the spouse has deducted a sum on which to live, and does not require a State to consider only the resources actually paid by the spouse to the applicant. The administration of public assistance based on the use of a formula is not inherently arbitrary. To require individual factual determinations of need would dissipate, in factfinding, resources that could have been spent on the needy. Pp. 47-48.

203 U.S.App.D.C. 146, 629 F.2d 180, reversed and remanded.

POWELL, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, WHITE, BLACKMUN, and REHNQUIST, JJ., joined. STEVENS, J., filed a dissenting opinion, in which BRENNAN and MARSHALL, JJ., joined, post, p. 50.

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POWELL, J., lead opinion

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.


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

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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).


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 [101 S.Ct. 2637] 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

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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.


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 [101 S.Ct. 2638] it, States could elect to provide Medicaid assistance

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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


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