Atkins v. Rivera

• Decision Date: 23 June 1986
• Docket Number: No. 85-632,85-632
• Parties: Charles ATKINS, Commissioner, Massachusetts Department of Public Welfare, Petitioner v. Santos RIVERA et al
• Court: U.S. Supreme Court

477 U.S. 154

106 S.Ct. 2456

91 L.Ed.2d 131

Charles ATKINS, Commissioner, Massachusetts Department of Public Welfare, Petitioner

v Santos RIVERA et al.

No. 85-632.

Argued April 21, 1986.

Decided June 23, 1986.

Syllabus

The Medicaid program of the Social Security Act (Act) provides medical assistance to persons whose income and resources are insufficient to meet the costs of necessary care and services. States participating in the program must provide coverage to the "categorically needy," that is, persons eligible for cash assistance under either the Supplemental Security Income for the Aged, Blind, and Disabled (SSI) program or the Aid to Families with Dependent Children (AFDC) program. A participating State also may elect to provide Medicaid benefits to the "medically needy," that is, persons who meet the nonfinancial eligibility requirements for cash assistance under AFDC or SSI, but whose income or resources exceed the financial eligibility standards for those programs. Under 42 U.S.C. § 1396a(a)(17), the medically needy may qualify for Medicaid benefits if they incur medical expenses, i.e., "spend down," in an amount that reduces their income to the eligibility level. That section provides that a State is to take into account, "except to the extent prescribed by the Secretary [of Health and Human Services], the costs . . . incurred for medical care," and must determine eligibility under standards that are "reasonable" and "comparable for all groups." Pursuant to § 1396a(a)(17), the Secretary issued a regulation permitting States to employ a maximum spenddown period of six months to compute income of the medically needy. Under § 1396a(a)(10)(C)(i)(III), a state Medicaid plan must prescribe "the single standard to be employed in determining income and resource eligibility for all such groups, and the methodology to be employed in determining such eligibility which shall be the same methodology which would be employed under [AFDC or SSI]." Under the Massachusetts Medicaid plan, persons who lack sufficient income measured on a monthly basis to meet their basic needs automatically qualify for Medicaid. Massachusetts also provides Medicaid benefits to persons who earn enough to meet their basic needs, but whose medical expenses within a 6-month period consume the amount by which their earnings exceed what is required for basic needs. The Massachusetts Department of Public Welfare denied respondents Medicaid benefits because their income exceeded the Medicaid eligibility limit, and they incurred insufficient medical expenses within a 6-month period. After the denial was upheld on administrative review, respondents sought injunctive relief from the Massachusetts Superior Court against use of the 6-month spenddown period. That court held the period invalid, and the Massachusetts Supreme Judicial Court agreed, holding that in providing that the "same methodology" be used for both the categorically needy and the medically needy, the Act requires that a 1-month period be applied in eligibility calculations for the medically needy.

Held: Massachusetts' 6-month spenddown period for calculating the income of the medically needy does not violate the Act's "same methodology" requirement. Pp. 161-167.

(a) The Secretary's regulation permitting States to employ a maximum spenddown period of six months plainly permits what Massachusetts has done. Because that regulation is supported by the Act's plain language and was adopted pursuant to the Act's explicit grant of rulemaking authority, it is entitled to "legislative effect" and is controlling unless it is arbitrary, capricious, or manifestly contrary to the Act. Pp. 161-162.

(b) The history of the "same methodology" requirement demonstrates that it was never intended to control the length of the spenddown, but rather simply to instruct States to treat components of income similarly for both medically needy and categorically needy persons. Pp. 162-166.

395 Mass. 189, 479 N.E.2d 639 (1985), reversed.

BLACKMUN, J., delivered the opinion for a unanimous Court.

H. Reed Witherby, Boston, Mass., for petitioner.

Jerrold J. Ganzfried, Washington, D.C., for U.S., as amicus curiae, by special leave of Court.

Rene H. Reixach, Jr., Rochester, N.Y., for respondents.

Justice BLACKMUN delivered the opinion of the Court.

This case concerns the means by which a State may calculate eligibility for medical-assistance benefits (Medicaid) under Title XIX of the Social Security Act.

In Massachusetts, persons who lack sufficient income, measured on a monthly basis, to meet their basic needs automatically qualify for Medicaid. The Commonwealth, however, also provides Medicaid benefits to persons, like respondents, who earn enough to meet their basic needs, but whose medical expenses within a 6-month period consume the amount by which their earnings exceed what is required for basic needs. Construing the Act's requirement that assistance for the two groups be calculated using the "same methodology," the Massachusetts Supreme Judicial Court held invalid the Commonwealth's use of a 6-month period for measuring medical expenses. The court ruled that inasmuch as a 1-month period is used to measure the income of those with insufficient means, an identical period must be used to measure medical expenses for persons like respondents. Because this holding conflicts with rulings of two Federal Courts of Appeals,¹ we granted certiorari. 474 U.S. 1018, 106 S.Ct. 566, 88 L.Ed.2d 551 (1985).

I

Medicaid, enacted in 1965 as Title XIX of the Social Security Act, 79 Stat. 343, as amended, 42 U.S.C. § 1396 et seq. (1982 ed. and Supp. II), is designed to provide medical assistance to persons whose income and resources are insufficient to meet the costs of necessary care and services. See Schweiker v. Hogan, 457 U.S. 569, 571, 102 S.Ct. 2597, 2600, 73 L.Ed.2d 227 (1982). The Federal Government shares the costs of Medicaid with States that elect to participate in the program. In return, participating States are to comply with requirements imposed by the Act and by the Secretary of Health and Human Services. See 42 U.S.C. § 1396a (1982 ed. and Supp. II); Schweiker v. Gray Panthers, 453 U.S. 34, 36-37, 101 S.Ct. 2633, 2636-2637, 69 L.Ed.2d 460 (1981).

States participating in the Medicaid program must provide coverage to the "categorically needy." 42 U.S.C. § 1396a(a)(10)(A) (1982 ed. and Supp. II). These are persons eligible for cash assistance under either of two programs: Supplemental Security Income for the Aged, Blind, and Disabled (SSI), 42 U.S.C. § 1381 et seq. (1982 ed. and Supp. II), or Aid to Families with Dependent Children (AFDC), 42 U.S.C. § 601 et seq. (1982 ed. and Supp. II).² Congress considered these persons "especially deserving of public assistance" for medical expenses, see Gray Panthers, 453 U.S., at 37, 101 S.Ct., at 2637, because one is eligible for AFDC or SSI only if, in a given month, he or she earns less than what has been determined to be required for the basic necessities of life. AFDC and SSI assistance are intended to cover basic necessities, but not medical expenses. Thus, if a person in this category also incurs medical expenses during that month, payment of those expenses would consume funds required for basic necessities.

A participating State also may elect to provide medical benefits to the "medically needy," that is, persons who meet the nonfinancial eligibility requirements for cash assistance under AFDC or SSI, but whose income or resources exceed the financial eligibility standards of those programs.³ See Schweiker v. Hogan, 457 U.S., at 581-582, 102 S.Ct., at 2605-2606. Under 42 U.S.C. § 1396a(a)(17), the medically needy may qualify for financial assistance for medical expenses if they incur such expenses in an amount that effectively reduces their income to the eligibility level. Only when they "spend down" the amount by which their income exceeds that level, are they in roughly the same position as persons eligible for AFDC or SSI: any further expenditures for medical expenses then would have to come from funds required for basic necessities.

In creating the spenddown mechanism of 42 U.S.C. § 1396a(a)(17) (1982 ed. and Supp. II), Congress provided that a State is to take into account, "except to the extent prescribed by the Secretary, the costs . . . incurred for medical care." Pursuant to this statute, the Secretary of Health and Human Services has instructed state agencies to "use a prospective period of not more than 6 months to compute income" of the medically needy. 42 CFR § 435.831 (1985).

A State electing to assist the medically needy must determine eligibility under standards that are "reasonable" and "comparable for all groups." 42 U.S.C. § 1396a(a)(17). In addition, and significantly for present purposes, state plans for Medicaid must describe

"the single standard to be employed in determining income and resource eligibility for all such groups, and the methodology to be employed in determining such eligibility which shall be the same methodology which would be employed under [AFDC or SSI]." 42 U.S.C. § 1396a(a)(10)(C)(i)(III) (emphasis added).

II

Respondent Rivera is employed outside her home and is the mother of two children. She receives no medical benefits from her job, and earns an amount slightly in excess of that which would permit her to qualify for AFDC. In 1983, Rivera applied to the Massachusetts Department of Public Welfare for Medicaid. Massachusetts has chosen to participate in the Medicaid program, Mass.Gen.Laws, § 118E:1 et seq. (1984), and also to provide coverage to medically needy persons.

To determine Rivera's eligibility for Medicaid, the Department first calculated her gross monthly income. See 106 Code of Mass.Regs. §§ 505.200, 505.210, 505.320 (1985). Next, the Department prescribed certain deductions and disregards to arrive at her monthly "countable income" of $535.30.⁴ See 106 CMR §§ 505.200 and 506.100-506.200 (1985)...