Ciampa v. Secretary of Health and Human Services, s. 82-1145

• Citation: 687 F.2d 518
• Decision Date: 27 August 1982
• Docket Number: 82-1175,Nos. 82-1145,s. 82-1145
• Parties: John CIAMPA, et al., Plaintiffs, Appellees, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellee, Commissioner of the Department of Public Welfare, Commonwealth of Massachusetts, Defendant, Appellant. John CIAMPA, et al., Plaintiffs, Appellees, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 518

687 F.2d 518

John CIAMPA, et al., Plaintiffs, Appellees, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellee,

Commissioner of the Department of Public Welfare,

Commonwealth of Massachusetts, Defendant, Appellant.

John CIAMPA, et al., Plaintiffs, Appellees, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellant.

Nos. 82-1145, 82-1175.

United States Court of Appeals First Circuit.

Argued May 6, 1982.

Decided Aug. 27, 1982.

Marc Richman, Attorney, Appellate Staff, Civil Div., U. S. Dept. of Justice, Washington, D. C., with whom William F. Weld, U. S. Atty., Boston, Mass., J. Paul McGrath, Asst. Atty. Gen., and Anthony J. Steinmeyer, Atty., Appellate Staff, Civil Div., U. S. Dept. of Justice, Washington, D. C., were on brief, for Secretary of Health and Human Services.

Joan C. Stoddard, Asst. Atty. Gen., Government Bureau, with whom Francis X. Bellotti, Atty. Gen., Boston, Mass., was on brief, for Thomas H. Spirito, etc.

Peter V. Berns, Washington, D.C., with whom Gary Bellow, Boston, Mass., was on brief, for plaintiffs, appellees.

Before PHILLIPS, ^* Senior Circuit Judge, BOWNES and BREYER, Circuit Judges.

BREYER, Circuit Judge.

This case involves interpreting the highly technical (and aptly named) "Pickle Amendment" to the Social Security Act, 42 U.S.C. § 1396a (note). This amendment restores Medicaid benefits to certain persons who at one time received both Supplementary Security Income ("SSI") and Old Age Survivors and Disability Insurance ("OASDI"). The appellants, state and federal governments, claim that these certain persons include only those whom an OASDI cost-of-living increase would otherwise cause to lose the Medicaid benefits. The appellees, a class of social security recipients, claim that the amendment also covers those who would qualify for the Medicaid benefits but for the OASDI cost-of-living increase. In essence, we are asked to decide whether the Pickle Amendment uses a "but for" test or a narrower test of "causation" in selecting its beneficiaries. And our decision will determine whether appellees, and others in their class, receive the more generous Medicaid benefits given to SSI recipients, or the less generous Medicaid benefits available to those who do not receive SSI. The district court, 511 F.Supp. 670 decided that the appellees' interpretation of the statute was correct. We agree.

I

To begin to understand this case, one must first have in mind the basic functions of the three government programs at issue. SSI, 42 U.S.C. § 1381 et seq., is a government assistance program of last resort. It helps the aged, blind and disabled poor. The federal government administers the program, paying each covered person enough money to bring his income up to "minimum" level. This "minimum" equals at least a nationally uniform, federally determined level. If a state is willing to pay the added cost, this "minimum" may be set higher. In Massachusetts, for example, the SSI minimum equals the federal minimum plus certain "optional state supplements" that the law allows. See 42 U.S.C. § 1382e; Constance v. Secretary of Health & Human Services, 672 F.2d 990, 991-92 (1st Cir. 1982).

OASDI, 42 U.S.C. § 401 et seq., is what is popularly known as "Social Security." It provides workers (or their families) cash payments when they retire, become disabled, or die. Mathews v. DeCastro, 429 U.S. 181, 185-86, 97 S.Ct. 431, 434-435, 50 L.Ed.2d 389 (1976). It is primarily an insurance program. Thus, the amount of payment depends in part upon how much a covered worker and his employers have previously paid into the system.

Medicaid, 42 U.S.C. § 1396 et seq., is a federal program that reimburses states for providing medical care to those who cannot afford it. See generally Harris v. McRae, 448 U.S. 297, 301, 100 S.Ct. 2671, 2680, 65 L.Ed.2d 784 (1980); Preterm v. Dukakis, 591 F.2d 121 (1st Cir.), cert. denied, 441 U.S. 952, 99 S.Ct. 2182, 60 L.Ed.2d 1057 (1979). For purposes of this case its most important feature is that anyone who qualifies for SSI automatically qualifies for Medicaid. 42 U.S.C. § 1396a(a)(10)(A). Cf. id. § 1396a(a)(10)(C); Schweiker v. Hogan, --- U.S. ----, ---- & n.19, 102 S.Ct. 2597, 2606 & n.19, 73 L.Ed.2d 227 (1982). But one who does not qualify for SSI (with certain exceptions not relevant here) does not qualify for Medicaid unless he is "medically needy"-i.e. unless his medical expenses are so great that his remaining income would be no more than four-thirds of the amount that would qualify him for state welfare assistance (under Aid to Families with Dependent Children, 42 U.S.C. § 601 et seq.). See 42 U.S.C. §§ 1396a(a)(10)(C), 1396b(f) (1). Leaving aside the technicalities, a person who qualifies to receive even one penny of SSI will automatically receive Medicaid benefits; should he fail to qualify for SSI, however, by even one penny, he will not receive Medicaid unless he runs up fairly significant medical bills. That fact lies at the heart of this case.

These different aid programs interact in other ways directly relevant to the case at hand. For one thing, a person can receive both OASDI and SSI. This could happen where a person's OASDI, which depends in part upon prior "contributions," is less than the eligibility level for SSI. It could also happen where the applicable SSI "minimum" includes an "optional state supplementary payment" sufficient to raise the SSI threshold above the level of OASDI. The situation of the Ciampas in November 1978 illustrates the point. They were entitled to receive $462.61 per month in SSI (consisting of both a federal and a state payment); they received $440.30 in OASDI; so, if they had received no other income, and if all their OASDI "counted" when it came to computing SSI, the Ciampas would have been entitled to $22.31 in SSI-the amount needed to bring their income up to the SSI "minimum." (Because they did receive other income, and because not all of their income "counted" in the SSI calculation, see p. 9, infra, the Ciampas in fact received a different amount of SSI.)

In fact, a person might be eligible for SSI even if his income is a little higher than the "minimum." This is so because some income is "disregarded"-or not counted-for purposes of calculating SSI. The most important "disregard" for our purposes is the general "$20 disregard"-the provision that says $20 per month of outside income will be ignored in calculating eligibility for, and the amount of, SSI. 42 U.S.C. § 1382a(b)(2) (A). Thus, if the SSI "minimum" were $462.61, the Ciampas would be eligible for some SSI payment as long as their outside income was less than $482.61 per month, for $20 of that outside income would be disregarded.

For another thing, both OASDI and SSI payment levels rise each year to take account of inflation. The OASDI payment (which is wholly federal) and the federal component of the SSI "minimum" rise by exactly the same percentage. 42 U.S.C. §§ 415(i), 1382f. The $20 income disregard, however, does not expand with inflation. Nor, unless the state so provides, does the state component of SSI. Cf. Reichenthal v. Harris, 492 F.Supp. 637, 640 (E.D.N.Y.1980); 42 U.S.C. § 1382g.

The preceding, somewhat oversimplified, account of the payment system suffices to understand the problem that gave rise to the Pickle Amendment. Simply put, the problem was that cost-of-living increases in OASDI were making some people ineligible for SSI. In and of itself, of course, the loss of SSI was not particularly significant. What was significant was the loss of automatic Medicaid that accompanied the loss of SSI. The Medicaid benefits were quite valuable-far more so than the small increases in OASDI that led to their being cut off-and it struck Congress as anomalous, to say the least, that a benefit given with one hand (a cost-of-living increase) led to the taking away of a more valuable benefit ("automatic" Medicaid) with the other.

How was it possible for a OASDI increase to result in a loss of SSI? One explanation lies in the fact that the state components of SSI were not indexed to inflation as were the federal component and OASDI. Thus, while the federal part of SSI was required to rise as rapidly as OASDI, the state part was not. An OASDI increase could therefore raise a recipient's outside income above the less rapidly rising SSI "minimum" in his state.

Another explanation, and the only one that Congress appears to have considered, lies in the unchanging $20 SSI disregard. This provision was such that even where SSI and OASDI levels rose by exactly the same percentage (as they would in a state that either had no program of supplementation or that indexed its supplements to the federal cost-of-living increases), a person might still lose SSI eligibility when OASDI and SSI went up. This consequence arises from a simple mathematical fact: changing two numbers (the OASDI payment and the SSI "minimum") by the same percentage will not ordinarily change their relationship significantly; but this change will matter a great deal if one is interested in comparing the difference between the two numbers to a different and fixed number (the $20 "disregard"). Suppose, for example, that (a hypothetical) Smith's OASDI payment, his only outside income, is $301 per month and the SSI minimum is $300. Using an extreme number for illustrative purposes, suppose inflation is 1,000 percent. Smith's OASDI payment then would become $3,010 and the SSI minimum would become $3,000. Smith would continue to qualify for SSI. But what if Smith's OASDI were initially $303 per month, instead of $300? He would still qualify for SSI before our 1,000 percent inflation, because after applying the $20 disregard, his outside income would be only $283 (not $303) for SSI purposes. After the 1,000 percent inflation, however, Smith's OASDI income would be $3,030 per month; the SSI minimum would rise to $3,000 per month; but, as long as the $20 disregard figure stays the same,...