Herweg v. Ray
| Decision Date | 22 April 1980 |
| Docket Number | No. 78-1664,78-1664 |
| Citation | 619 F.2d 1265 |
| Parties | Elvina M. HERWEG, by her husband and next friend, Darrell E. Herweg, and Darrell E. Herweg, and all others similarly situated, Appellants, v. Robert D. RAY, Individually and in his capacity as Governor of the State ofIowa, and Kevin J. Burns, Individually and in his capacity as Commissioner ofthe Iowa Department of Social Services, Appellees. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Gill Deford, National Senior Citizens Law Center, Los Angeles, Cal., for appellants; Neal S. Dudovitz, Los Angeles, Cal., and Robert L. Bray, Legal Services, Corp. of Iowa, Des Moines, Iowa, on brief.
Stephen C. Robinson, Asst. Atty. Gen., Des Moines, Iowa, for appellee; Richard C. Turner, Atty. Gen., Des Moines, Iowa, on brief.
Thomas J. Miller, Atty. Gen., and Stephen C. Robinson, Special Asst. Atty. Gen., Des Moines, Iowa, on supplementary brief.
David R. Smith, Washington, D. C., for amicus curiae, U. S. Dept. of Health, Education and Welfare.
Before GIBSON, Chief Judge, * and LAY, HEANEY, BRIGHT, ROSS, STEPHENSON, HENLEY, and McMILLIAN, Circuit Judges.
Pursuant to the attached opinion, the judgment of the district court is affirmed by an equally divided court, except that portion relating to the sources of income the state may consider as available to Medicaid applicants and recipients, which is reversed and remanded.
Elvina M. Herweg and her husband, Darrell E. Herweg, individually and as representatives of a class, appeal a decision by the district court 1 making Medicaid eligibility determinations affecting the Herwegs and the class. The district court, in January 1978, enjoined the state of Iowa from determining Medicaid eligibility by "deeming," through the use of an arbitrary formula, the income of a noninstitutionalized spouse as available to the institutionalized spouse. Herweg v. Ray, 443 F.Supp. 1315, 1320 (S.D.Iowa 1978).
Later, upon request of the parties, the district court defined the contours of relief it decided to be appropriate. Based on the relevant Medicaid statute, 42 U.S.C. § 1396a(a)(17) the district court disapproved deeming by an arbitrary formula but approved Iowa's use of a factual determination in each case as to the amount the state could consider as available from the noninstitutionalized spouse for the care of the institutionalized spouse. Herweg v. Ray, 481 F.Supp. 914, 917 (S.D.Iowa 1978). Appellants, however, contend that this solution violates Medicaid statutes and regulations. They argue that Medicaid eligibility must be determined only on the basis of contributions actually made by the noninstitutionalized spouse to the institutionalized spouse's care. They further argue that if the spouse does not actually contribute, even though financially able, the state should determine that the institutionalized spouse is eligible and make full payment of benefits. Then if it desires, the state could sue the financially responsible spouse under its relative responsibility law.
Because the district court invalidated Iowa's "deeming" procedure on statutory grounds the constitutional claims of the plaintiffs were not reached. Herweg v. Ray, supra, 443 F.Supp. at 1320. Those claims allege that "deeming" violates the due process clause and the equal protection clause by creation of an irrebuttable presumption and an arbitrary classification.
Before addressing the issues raised by appellants, we will review Iowa's prior "deeming" procedures as applied to the Herwegs' situation.
Since August 1976, 47 year old Elvina Herweg has been in a comatose state which resulted from two cerebral hemorrhages. Mrs. Herweg was placed in a long-term care facility in November 1976.
Darrell Herweg was employed as a butcher when this action was instituted and his gross monthly income was $1,350 (net $1,032). The Herwegs have three teenage daughters at home.
In January 1977, Mr. Herweg applied for Medicaid assistance for his wife. Mrs. Herweg was found eligible for Medicaid and Mr. Herweg was required to pay $234.80 per month toward his wife's medical expenses which were approximately $1,374 per month. The "deemed" amount, $234.80 per month, was arrived at by use of a formula which excluded half of Mr. Herweg's earned income and then excluded standard living allowances for Mr. Herweg and the children at home. Standard exclusions for work expenses and the personal needs of the institutionalized spouse were also allowed.
In June 1977, apparently upon advice from HEW, the state of Iowa's formula for determining eligibility was changed in that one-half of Mr. Herweg's earned income was not excluded. This change resulted in a determination that Mrs. Herweg was no longer eligible for Medicaid and led to the filing of this suit. After the district court granted a temporary restraining order, the state again changed the formula to exclude one-half of Mr. Herweg's earned income. Mrs. Herweg was again determined eligible for Medicaid and based on increased living allowance exclusions, $150.30 of Mr. Herweg's monthly income was deemed available for Mrs. Herweg's medical expenses.
The district court held that the state of Iowa's method of "deeming" through the use of an arbitrary formula conflicted with 42 U.S.C. § 1396a(a)(17) and the applicable regulations 45 C.F.R. 248.3(b)(a)(ii) (currently, 42 C.F.R. 435.723(d) (1978)). Id. at 1320. However, without specifically ruling on the validity of the regulation, the district court found that under the statute, 42 U.S.C. § 1396a(a)(17) the state should be allowed to make a factual determination of actual income and expenses of the noninstitutionalized spouse and determine a reasonable amount to require as a contribution. Id. at 1320. The state of Iowa submitted to the district court proposed procedures for making such a factual determination in each case and the district court approved the state's new procedures as entirely consistent with federal law.
It is important to note that the state of Iowa is not challenging the district court's determination that "deeming" through the use of an arbitrary formula is contrary to § 1396a(a)(17). Rather, the conflict involved in this appeal is the method the state of Iowa now uses, which is a factual determination of income actually received and expenses necessarily incurred, to determine the amount of money a state may require as a contribution from the noninstitutionalized spouse who is reasonably able to pay some of the medical expenses of his Medicaid eligible, institutionalized spouse.
The district court certified the class, as requested by plaintiffs, as including instances where the institutionalized spouse is eligible for Medicaid. 2 However, it is clear that the procedures plaintiffs challenge involve the method used to calculate the institutionalized spouse's available income. This same calculation is used not only when determining the amount of the required contribution as in the case of the Herwegs, but also in determining initial eligibility for Medicaid. Therefore, our concern in this case must of necessity focus on not only the application of the procedure to one who is eligible for Medicaid but also the application of the procedure to one who seeks Medicaid eligibility but whose income and expenses may justify the denial of eligibility under the statute.
In view of the recent Supreme Court decision in Chapman v. Houston Welfare Rights Organization, 441 U.S. 600, 99 S.Ct. 1905, 60 L.Ed.2d 508 (1979), a brief review of jurisdiction is necessary. Chapman involved a challenge to state welfare regulations based solely on the grounds that the regulation conflicted with the Social Security Act. The Supreme Court indicated that "an allegation of incompatibility between federal and state statutes and regulations does not, in itself, give rise to a claim 'secured by the Constitution' within the meaning of (28 U.S.C.) § 1343(3)." Id. at 615, 99 S.Ct. at 1915. The Court also rejected the argument "that § 1983 is an Act of Congress 'providing for equal rights' within the meaning of § 1343(3)" or a "statute 'providing for the protection of civil rights, including the right to vote' " within the meaning of § 1343(4). Id. at 617-18, 99 S.Ct. at 1915-1916. The Supreme Court then held that "(t)he Social Security Act does not deal with the concept of 'equality' or with the guarantee of 'civil rights,' as those terms are commonly understood." Id. at 621, 99 S.Ct. at 1917. Therefore, the Social Security Act is not included within the meaning of § 1343(3) or (4). Id. at 621, 99 S.Ct. at 1917. However, neither Chapman nor the case with which it was consolidated on review, Gonzalez v. Young, involved any constitutional claims other than a basic supremacy clause challenge. Further, the Supreme Court specifically noted that "(w)here the underlying right is based on the Constitution itself, rather than an Act of Congress, § 1343(3) obviously provides jurisdiction." Id. at 618 n.36, 99 S.Ct. at 1916 n.36. The Supreme Court in Chapman did not alter its previous decision in Hagans v. Levine, 415 U.S. 528, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974). In Hagans, the Supreme Court approved the review of a statutory conflict claim under a pendent jurisdiction rationale where the district court had found a substantial constitutional question presented. Id. at 536, 94 S.Ct. at 1378. The Supreme Court also noted that:
A (constitutional) claim is insubstantial only if ' "its unsoundness so clearly results from the previous decisions of this court as to foreclose the subject and leave no room for the inference that the questions sought to be raised can be the subject of controversy." '
Id. at 538, 94 S.Ct. at 1379 (citations omitted).
In the present case, the complaint alleged a violation of the due process clause, in that "deeming" constitutes an irrebuttable presumption not rationally...
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