Hogan v. Harris

• Decision Date: 21 November 1980
• Docket Number: Civ. A. No. 80-883-T.
• Citation: 501 F. Supp. 1129
• Parties: George HOGAN et al., Plaintiff, v. Patricia HARRIS et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

501 F. Supp. 1129

George HOGAN et al., Plaintiff, v. Patricia HARRIS et al., Defendants.

Civ. A. No. 80-883-T.

United States District Court, D. Massachusetts.

November 21, 1980.

William H. Simon, Legal Services Institute, Jamaica Plain, Mass., Mark Coven, Greater Boston Elderly Legal Services, Boston, Mass., Gill Deford, National Senior Citizens Law Centre, Los Angeles, Cal., for plaintiff.

Thomas Miller, Asst. Atty. Gen., Boston, Mass., for Commonwealth of Mass.

John B. Maclay, Penny Quinn, U. S. Dept. of Justice, Civil Division, Washington, D. C., Donald R. Anderson, Asst. U. S. Atty., Boston, Mass., for United States.

OPINION

TAURO, District Judge.

This action challenges fundamental components in the "complex legislative mosaic"¹ of federal-state public assistance.² Plaintiffs are a group of aged and disabled Social Security recipients. Their complaint is that, under the Massachusetts Medicaid program, they receive substantially less income for basic nonmedical living expenses than do identically situated aged and disabled persons whose source of support is Supplemental Security Income (SSI). This disparate treatment, they allege, creates an irrational classification which violates constitutional guarantees of equal protection.

Plaintiffs' grievances are best understood by examining the plight of Mr. and Mrs. Hunter, two of the named plaintiffs. Mr. Hunter worked for 41 years as a longshoreman, bartender, hotel clerk, and clothing alteration checker. He paid Social Security taxes during that period, and he and his wife now receive approximately $534.00 per month in Social Security benefits.

As Social Security beneficiaries, the Hunters are not automatically eligible for Medicaid assistance. Rather, the Massachusetts Medicaid program requires that they pay their own medical bills until they have "spent down" their income to a point where they have only $400.00 per month available for nonmedical living expenses. When they have done so, they become eligible for Medicaid assistance.

SSI beneficiaries, on the other hand, are not subject to such a "spend down" requirement before receiving Medicaid assistance. Instead, SSI recipients receive a "basic need" subsistence of $513.00 per month, in addition to having their medical needs met by Medicaid. This means that the Hunters have approximately $100.00 less per month to spend on food and clothing than do their SSI counterparts.

The irony of the Hunters' situation becomes apparent when one realizes that if their income were one dollar less per month, they would be considered eligible to become SSI beneficiaries. As such, they would receive full Medicaid coverage and be allowed $513.00 per month for their nonmedical living expenses. In other words, as SSI recipients they would not have to "spend down" to a $400.00 per month level in order to have their medical bills covered by Medicaid. The bottom line impact on the Hunters is that they, unlike their SSI counterparts, must exist at a support level roughly 20% below the basic need standard established under SSI.

By their cross motions for partial³ summary judgment, the parties raise the issue as to whether the Massachusetts Medicaid program is unconstitutional insofar as it forces Social Security recipients to "spend down" approximately $100.00 per month below Supplementary Security Income levels before becoming eligible to receive medical benefits.

I. Background

The classification at issue here arises from the convergence of three assistance programs: Old Age, Survivors, and Disability Insurance (OASDI), more commonly known as Social Security;⁴ SSI;⁵ and Medicaid.⁶

A) Social Security

Social Security, the basic social insurance program established by the Social Security Act of 1935, provides income security for the aged, the disabled, and their survivors and dependents. Essentially, eligibility depends on the existence of a disability, 42 U.S.C. § 423(a)(1), or the attainment of age 62, 42 U.S.C. § 402(a), and a sufficiently long history of payment of Social Security tax. 42 U.S.C. § 423(c)(1) (disability); § 414(a) (old age).

B) Supplemental Security Income

SSI, enacted in 1973 as Title XVI of the Social Security Act, is a cash assistance program of last resort for aged, blind, or disabled people who, for whatever reason, lack sufficient income to meet their basic needs. 42 U.S.C. §§ 1382c(a); 1382. Unlike Social Security, SSI is available without regard to work history or tax payments. An individual who is aged, blind, or disabled need only establish financial need in order to be eligible for SSI benefits. Financial need is established if an individual's income falls below SSI income standards. Benefits are provided sufficient to raise the individual's income to the minimum SSI level. 42 U.S.C. §§ 1382(b), 1382(e)(2), 1382a.

A basic minimum SSI level is set by Congress. But the states may, and in some cases must, raise the level by supplementing the federal benefits with state funds. See 42 U.S.C. § 1382e.

C) Medicaid

Medicaid, a federal-state program established in 1965, pays for the cost of medical treatment for certain categories of the needy. The states formulate individual Medicaid plans and administer the programs, subject to federal statutory and regulatory requirements. 42 U.S.C. § 1396a. After paying out benefits, the states receive federal reimbursement for a certain percentage of total cost. 42 U.S.C. § 1396b.

The two basic groups of eligible Medicaid recipients are the "categorically needy" and the "medically needy." The categorically needy consist of recipients of SSI and Aid to Families with Dependent Children (AFDC). 42 U.S.C. § 1396a(a)(10)(A). The medically needy include those whose income is too high to qualify them for AFDC or SSI, but too low to pay necessary medical expenses. 42 U.S.C. § 1396a(a)(10)(C). States which participate in Medicaid must provide benefits to the categorically needy. 42 U.S.C. § 1396a(a)(10)(A). On the other hand, participating states may or may not provide for the medically needy. 42 U.S.C. § 1396a(a)(10)(C).

In 1967, Congress added the provision which has led to the discrimination complained of here, namely, a limit on federal reimbursement for aid to the medically needy. Under 42 U.S.C. § 1396b(f)(1)(B), the state may set maximum income levels for the medically needy no higher than 133 1/3 percent (i. e. four thirds) of the AFDC income standards in force in that state.⁷ Medically needy individuals with income higher than four thirds the AFDC standard may still receive benefits, but they must first "spend down" the difference between their income and the four-thirds level on medical expenses. In contrast, SSI recipients automatically receive full Medicaid benefits without spending down. 42 U.S.C. § 1396b(f)(4). In Massachusetts, the result is that Social Security recipients with high medical expenses have less income to meet nonmedical living expenses than do SSI beneficiaries. This is so even though SSI payments are intended to be geared at a "basic need" level.

II. Facts

The circumstances of the named plaintiffs illustrate the operation and impact of these programs. Plaintiffs George and Pearl Hogan have a combined monthly income of $646.60 in Social Security benefits. Mr. Hogan has a large cavity in his chest from surgical treatment of tuberculosis, and requires a daily antibacterial dressing change, which must be performed by a trained nurse. The cost of this treatment, along with the necessary medications and supplies, amounts to more than $1000 a month.

Henry and Celia Beberman together receive $668.10 a month in Social Security benefits. Mrs. Beberman, a 77-year-old victim of diabetes, osteomyelitis, deafness, and other ailments, needs daily assistance from a home health aid, and weekly visits by a nurse. Her medical expenses exceed $1300 a month.

Plaintiffs George and Cecilia Hunter have a combined monthly income of $534.70 in Social Security benefits. Mr. Hunter, 68 years of age, suffers from glaucoma and is a double amputee confined to a wheelchair. He must travel to Boston City Hospital twice a month for medical treatment, and can get there only by ambulance, at a cost of $162 per trip. In addition, he requires medication costing more than $50 a month.

Under the Massachusetts Medicaid Plan, the medically needy must pay their own medical expenses until they have spent down their income to $400 a month (i. e. four thirds of the Massachusetts AFDC standards for a family of corresponding size).⁸ The Massachusetts SSI (i. e. categorically needy) eligibility levels, however, are considerably higher than $400 a month. Aged couples receive a maximum of $513.78 a month and couples with one aged individual and one disabled individual are eligible for $504.04 a month.

The basic federal SSI payment level is $312.30 a month. In addition, Massachusetts provides a supplemental benefit of $201.48 for an aged couple, and $191.74 for a disabled/aged couple. The disparate impact on the plaintiffs results because of the interplay between the four-thirds limit on federal reimbursement for the medically needy and the generous state supplements that Massachusetts provides to SSI recipients.

That impact means that, in order to be eligible for Medicaid, plaintiffs must "spend down" their income⁹ on medical expenses to a point where they have only $400 per month available for food, clothing and shelter. To put it another way, Massachusetts allows Social Security recipients in plaintiffs' circumstances $400 a month for nonmedical expenses. If instead the plaintiffs were ineligible for Social Security, or if their Social Security payments were insufficient to put them above the SSI level, they would be automatically eligible for Medicaid as categorically needy SSI recipients. Massachusetts would then allow them $513.78 (or $504.04 in the case of the Hogans) a month for nonmedical living expenses.

As has been pointed out, the Hunters provide a...