Barone v. Department of Human Services, Div. of Medical Assistance and Health Services, Bureau of Pharmaceutical Assistance to the Aged and Disabled

• Decision Date: 24 April 1986
• Citation: 509 A.2d 786,210 N.J.Super. 276
• Parties: Ann BARONE, Plaintiff-Appellant, v. DEPARTMENT OF HUMAN SERVICES, DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, BUREAU OF PHARMACEUTICAL ASSISTANCE TO THE AGED AND DISABLED, Defendant-Respondent. Lottie ADKINS, Plaintiff-Appellant, v. DEPARTMENT OF HUMAN SERVICES, DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, BUREAU OF PHARMACEUTICAL ASSISTANCE TO THE AGED AND DISABLED, Defendant-Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 276

210 N.J.Super. 276

509 A.2d 786

Ann BARONE, Plaintiff-Appellant, v. DEPARTMENT OF HUMAN SERVICES, DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, BUREAU OF PHARMACEUTICAL

ASSISTANCE TO THE AGED AND DISABLED,

Defendant-Respondent.

Lottie ADKINS, Plaintiff-Appellant, v. DEPARTMENT OF HUMAN SERVICES, DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES, BUREAU OF PHARMACEUTICAL

ASSISTANCE TO THE AGED AND DISABLED,

Defendant-Respondent.

Superior Court of New Jersey,

Appellate Division.

Argued March 4, 1986.

Decided April 24, 1986.

Edward Kopelson, Newark, Community Health Law Project, for plaintiffs-appellants.

Melissa E. Hager, Deputy Atty. Gen., for defendant-respondent (W. Cary Edwards, Atty. Gen., attorney; Deborah Poritz, Deputy Atty. Gen., Trenton, of counsel).

Before Judges GAULKIN, DEIGHAN and STERN.

The opinion of the court was delivered by

STERN, J.S.C., temporarily assigned.

We hold that the Department of Human Services did not err in interpreting N.J.S.A. 30:4D-21, as it provided between 1981 and 1985, to require actual receipt of federal Social Security benefits as a prerequisite to receipt of state Pharmaceutical Assistance to the Aged and Disabled (PAAD) and that, as so interpreted, and as amended in 1985, N.J.S.A. 30:4D-21 is not unconstitutional.

I

Appellants are disabled persons under age 65. However, their applications for PAAD benefits were denied and they appeal. They contend: (1) that the regulations of the Department of Human Services limiting eligibility for PAAD disability benefits to those actually receiving federal Social Security disability benefits exceeded the authority of N.J.S.A. 30:4D-21, as it read at the time of their application, and (2) that the classification created by the regulations and by the 1985 amendment to N.J.S.A. 30:4D-21 is unconstitutional.

The applications for PAAD benefits were based on disability and need. Because appellants were not recipients of federal Social Security disability benefits, the denial was consistent with regulations of the Department. However, the primary question is whether those regulations were consistent with the governing statute at the time of the respective applications.

After the applications were rejected, N.J.S.A. 30:4D-21 was amended to expressly provide that needy disabled people are entitled to PAAD benefits only if they are actually receiving Social Security disability benefits, although needy people over age 65 are entitled to PAAD benefits without regard to their Social Security status. Since appellants' continuing eligibility is subject to the requirements of this amended provision, we must consider the constitutionality of the statute as it provided prior to August 1, 1985, if we accept the Department's construction and, in any event, its constitutionality after the effective date of the 1985 amendment.

II

Appellants Lottie Adkins and Ann Barone filed separate eligibility applications with the Division of Medical Assistance and Health Services of the Department of Human Services (Division) for PAAD benefits in January 1985. The applications were rejected on January 25, 1985. Each applicant was advised that, because she did not meet "the age requirement of 65 years", she had "not furnished sufficient proof of disability." The rejections also contained reference to an additional prerequisite to the effect that each applicant "must be receiving Social Security Title II Disability benefits to be eligible for PAAD."

Plaintiffs appeal. The appeals were consolidated for all purposes in April 1985 and are being decided with other matters involving the same questions. ¹

Adkins was 59 and single at the time of her application for PAAD benefits. She was not eligible for federal Social Security benefits because she did not work for an employer that contributed to the federal Social Security program when she commenced employment with Essex County. She retired with a permanent total disability in 1979 and began receiving a disability pension from the Essex County Employees' Retirement System. In 1984 she was receiving an annual pension of $7,919.31 from the county. The insurance coverage provided through the county pension plan did not include prescription drug coverage.

Dr. Sidney Friedman, an internist who conducted examinations for the State Division of Disability Determinations, certified that he examined Adkins in December 1980 and December 1984 and found her totally and permanently disabled according to the standards applicable to Social Security disability determinations. Dr. Friedman also found Ms. Adkins unable to work and a poor candidate for rehabilitation for future work. She had severe rheumatic and orthopedic problems as well as heart disease, gastritis, bronchitis, and psychiatric and ophthalmic conditions. These facts are not disputed for purposes of these proceedings.

Ms. Barone was 61 at the time her PAAD application was submitted. However, she was ineligible to receive Social Security benefits because she had not worked outside the home since she was age 16. A social worker for the State Commission for the Blind and Visually Impaired certified that Ms. Barone was "a registered blind person". A report of an eye examination performed on her by Dr. Philip Eicher in July 1984 showed that her near vision of 20/800 in each eye was only 20/200 with best correction. Ms. Barone certified that she also had uncontrolled diabetes mellitus, cardiovascular disease and deafness.

Ms. Barone was married at the time of her application. Her husband had received $761 in his most recent monthly Social Security check. Ms. Barone certified in January 1985 that his monthly Social Security checks were their only source of income. As in the Adkins case, these facts are not in dispute.

The Division contends that only persons actually "receiving Social Security benefits" were eligible for PAAD benefits at the time of these applications. It argues that opening eligibility to others, including those considered 100% disabled for purposes other than the federal Social Security program, would substantially increase the cost of the PAAD program, possibly jeopardizing it altogether, and in any event, is beyond the legislative intent, as evidenced by the legislative history and fiscal note projections premised on information relating to the federal Social Security system. ²

III

As noted, appellants contend that when their applications were rejected, the PAAD regulations ( N.J.A.C. 10:69A-6.2) requiring receipt of Social Security benefits as a prerequisite to receiving PAAD benefits as a disabled person under 65, exceeded the statutory authority of N.J.S.A. 30:4D-21.

The act that created the PAAD program, N.J.S.A. 30:4D-20 et seq., originally the "Pharmaceutical Assistance to the Aged" program (L.1975, c. 194, eff. August 21, 1975), supplemented the Medical Assistance and Health Services Act, N.J.S.A. 30:4D-1 et seq. (L.1968 c. 413), the purpose of which was enunciated as follows:

It is the intent of the Legislature to make statutory provision which will enable the State of New Jersey to provide medical assistance, insofar as practicable, on behalf of persons whose resources are determined to be inadequate to enable them to secure quality medical care at their own expense, and to enable the State, within the limits of funds available for any fiscal year for such purposes, to obtain all benefits for medical assistance provided by the Federal Social Security Act as it now reads or as it may hereafter be amended, or by any other Federal act now in effect or which may hereafter be enacted. It is further the intent of the Legislature that benefits provided hereunder shall be last resource benefits notwithstanding any provisions contained in contracts wills, agreements or other instruments. [ N.J.S.A. 30:4D-2; L.1968, c. 413, § 2, as amended L.1979, c. 365, § 1, eff. Feb. 4, 1980.]

By Chapter 499 of the Laws of 1981, the Pharmaceutical Assistance to the Aged Program was expanded to provide pharmaceutical assistance to the aged and disabled.

In January 1985 when appellants' PAAD eligibility applications were filed, N.J.S.A. 30:4D-21 read as follows:

Any single resident of this State who is either disabled pursuant to the Federal Social Security Act (42 U.S.C. section 416(i)) or 65 years of age and over whose annual income is less than $12,000.00, or any married resident whose annual income combined with that of his spouse is less than $15,000, shall be eligible for "Pharmaceutical Assistance to the Aged and Disabled" if he is not otherwise qualified for assistance under the act to which this act is a supplement. [As amended L.1981, c. 499, § 1. ³ [Emphasis supplied]

42 U.S.C.A. § 416(i), to which N.J.S.A. 30:4D-21 referred, is part of Title II of the federal Social Security Act, which governs the federal old-age, survivors, and disability insurance benefits program. Section 416(i) covers two different topics, which are reflected in the title of subsection (i), "Disability; period of disability." Subsection (i) has three subparts. 42 U.S.C.A. § 416(i)(1) defines "disability," while 42 U.S.C.A. § 416(i)(2) and (3) relate to the "period of disability" necessary for eligibility. Neither (i)(2) nor (i)(3) touches on the meaning of "disability" itself.

Appellants contend that the phrase "disabled pursuant to the Federal Social Security Act (42 U.S.C. section 416(i))" makes clear that the applicant must be "disabled" within the meaning of that subsection, not that she must actually be collecting Social Security benefits. They stress that N.J.S.A. 30:4D-21 used the phrase "disabled pursuant to the Federal Social Security Act (42 U.S.C. section 416(i)) ", not "eligible under," or "receiving benefits pursuant to" Title II of the Federal Social Security Act.

The Division, however, emphasizes that the PAAD provision incorporated all of § 416(i), including sub parts (2) and (3), which do not relate to the definition of "disab...