Emerson v. Steffen
| Decision Date | 20 March 1992 |
| Docket Number | 91-1840,Nos. 91-1837,s. 91-1837 |
| Parties | , 36 Soc.Sec.Rep.Ser. 698, Medicare & Medicaid Guide P 40,086 James B. EMERSON, individually and on behalf of all others similarly situated, Appellee, v. Natalie Haas STEFFEN, in her official capacity as Commissioner of the Minnesota Department of Human Services, Appellant, Louis W. Sullivan, M.D., in his official capacity as Secretary of the United States Department of Health and Human Services. James B. EMERSON, individually and on behalf of all others similarly situated, Appellee, v. Natalie Haas STEFFEN, in her official capacity as Commissioner of the Minnesota Department of Human Services, Louis W. Sullivan, M.D., in his official capacity as Secretary of the United States Department of Health and Human Services, Appellant. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Patricia A. Sonnenberg, Asst. Atty. Gen., St. Paul, Minn., argued for appellant, Natalie Haas Steffen.
Robert D. Kamenshine, Dept. of Justice, Washington, D.C., argued (William Kanter, appeared on brief), for appellant Louis W. Sullivan, M.D.
Laurie N. Davison, Minneapolis, Minn., argued (Patricia M. Siebert, appeared on brief), for appellee.
Before LAY, Chief Judge, * ARNOLD, Circuit Judge, ** and STUART, *** Senior District Judge.
The plaintiff in this class action 1 brought suit challenging a certain feature of Minnesota's Medicaid plan. Plaintiff's only income is $863 a month in social-security disability benefits. A divorce decree requires him to pay $200 a month for the support of his children. Medicaid eligibility depends on what income and resources are "available." 42 U.S.C. § 1396a(a)(17)(B). Minnesota's Medicaid plan treats the $200 plaintiff receives, but then must pay in child support, as "available" to him. It must therefore be counted for purposes of determining his Medicaid eligibility. The question presented is whether this aspect of the Minnesota plan violates the statute by treating as "available" income that really is not. The District Court held that it does and granted summary judgment for the plaintiff. Emerson v. Wynia, 754 F.Supp. 705 (D.Minn.1991). The Secretary of the United States Department of Health and Human Services, who wishes the State plan upheld, appeals. The District Court's interpretation of the statute is reasonable, but so is the Secretary's. We therefore reverse.
The Medicaid program was enacted in 1965 as Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., as a jointly financed federal-state program designed to provide health care to needy individuals. Although a state is not required to participate in Medicaid, a state that does so must develop a plan that complies with the Medicaid Act and the Secretary's regulations.
Participating states must provide assistance to the "categorically needy." 42 U.S.C. § 1396a(a)(10)(A). This group includes individuals eligible for cash assistance under the Supplemental Security Income (SSI) program or the Aid to Families with Dependent Children (AFDC) program. States may also provide assistance to the "medically needy"--people who can't pay for their medical expenses, but whose income is too great to enable them to qualify for the "categorically needy" program. In either case, the Act requires states to adopt standards for determining eligibility for Medicaid which
provide for taking into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant or recipient and ... as would not be disregarded ... in determining his eligibility for [SSI or AFDC].
42 U.S.C. § 1396a(a)(17)(B) (emphasis ours). The meaning of the word "available" is the crux of this case. We must decide what income is available and thus countable in determining eligibility for Medicaid.
The State of Minnesota provides medical assistance to both the categorically needy and the medically needy. The plaintiff class in this case is made up of medically needy, as opposed to categorically needy, individuals who either have been or will be denied or cut off from medical assistance because of Minnesota's policy of considering child support paid by applicants or recipients as income "available" to them. The plaintiffs claim that Minnesota's plan and the Secretary's support of that plan conflict with the plain language of 42 U.S.C. § 1396a(a)(17)(B), its legislative history, and post-enactment legislation.
Before delving into a statutory analysis, we must determine the proper standard of review. How much deference should an agency get in construing a statute it administers? The Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), made it very clear that so long as the agency's interpretation is a reasonable one, it must be upheld. To reach that conclusion, the Chevron Court asked and answered two questions: First, has Congress directly spoken on the issue at hand? If it has not, courts cannot simply replace the agency's interpretation with their own preferred construction of the statute. Second, is "the agency's answer ... based on a permissible construction of the statute"? Id. at 843, 104 S.Ct. at 2782. If it is, we must defer to the agency. Such deference is particularly important here, in light of the fact that the statute in question expressly delegates to the Secretary the power to prescribe standards for determining availability. In City of St. Louis v. Department of Transportation, 936 F.2d 1528, 1533 (8th Cir.1991), we summarized the law by saying that the agency's judgment would not be disturbed "unless it [was] arbitrary, capricious, or an abuse of discretion." 2
Plaintiffs argue that the statute, by its plain language, supports their view of congressional intent, that available income does not include court-ordered child-support payments. Consequently, they continue, we need never reach the second question in Chevron--whether the Secretary's interpretation is reasonable--since Congress has spoken on the matter. To support their claim that the statute's language is clear and unambiguous, they use Webster's Third New International Dictionary, which defines available as "such as may be availed of; capable of use for the accomplishment of a purpose...." Appellees' Brief 11. While we do not dispute the correctness of this definition, we do not believe that our agreement with the dictionary necessitates agreement with the plaintiffs. If it did, it would be hard to know how to draw the line in allowing exclusions from available income. True, as plaintiffs state, income which has been paid out in child support cannot later be "used" or "availed of" to pay another bill, but neither can income which has been paid out for groceries. Although maybe different in kind, the two are both obligations of the person making the payments. To say that income paid out in child support is not "available income" because it is no longer available to meet the payor's needs begs the question. Did Congress intend to imply the phrase "to meet the payor's needs," and if so, what obligations are considered needs of the payor? One could reasonably argue that supporting his children is one of the payor's needs. At any rate, the statute itself does not rule out such an argument.
Having concluded that Congress has not directly addressed the issue of availability, we venture to step two in the Chevron analysis: whether the Secretary's policy of including child-support payments when determining available income is based on a permissible construction of the statute. That is, is it reasonable? The plaintiffs argue, and the District Court held, that the legislative history, in stating that only income which is "actually available" should be considered in determining eligibility, indicated Congress's intent to exclude court-ordered child-support payments from income. We disagree.
The Senate Report the plaintiffs rely on states in pertinent part:
Another provision is included that requires States to take into account only such income and resources as (determined in accordance with standards prescribed by the Secretary), are actually available to the applicant or recipient and as would not be disregarded.... Income and resources taken into account, furthermore, must be reasonably evaluated by the States. These provisions are designed so that the States will not assume the availability of income which may not, in fact, be available or overevaluate income and resources which are available. Examples of income assumed include support orders from absent fathers[ ] which have not been paid or contributions from relatives which are not in reality received by the needy individual.
S.Rep. No. 404, 89th Cong., 1st Sess. 78 (1964), reprinted in 1965 U.S.Code Cong. & Admin.News 1943, 2018 (emphasis ours). This passage suggests that Congress was concerned not with whether income received and then paid out by a Medicaid recipient was available, but rather with whether income deemed received had actually been received by, and therefore was actually available to, the recipient. In our opinion, the legislative history supports the Secretary's construction, not the plaintiffs'.
Although admitting that Congress expressly delegated to the Secretary authority to prescribe standards for determining availability, the plaintiffs argue that the Secretary has not promulgated any regulations on the subject and thus that his position is not entitled to "legislative effect." Appellees' Brief 32. First, we do not agree with the plaintiffs that the Secretary has not promulgated any relevant regulations. Furthermore, even if we did, neither Chevron nor City of St. Louis requires that the agency's position be stated in a regulation to be entitled to deference.
The Secretary has promulgated several regulations governing...
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