Contextual Background, Facts, and Procedural History
At issue in Jean's appeal is whether the Agency properly included certain property belonging to her husband, Isaac W. May ("Isaac"), as a resource available to Jean for the purpose of determining her eligibility for Medicaid benefits under Alabama's State Plan. However, before discussing the facts and procedural history that are relevant to Jean's appeal and the cross-appeal, we give a general discussion of the history and purposes of the federal Medicaid program ("the Medicaid program"). The Medicaid program was established to enable each state
"to furnish (1) medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care."
42 U.S.C. § 1396-1. In pertinent part, "medical assistance" includes nursing-home care. See 42 U.S.C. § 1396d(a) (defining "medical assistance");1 see also 42 U.S.C. § 1396d(f) (defining "nursing facility services"); 42 U.S.C. § 1396r(a) (defining "nursing facility").
Funds appropriated by the federal government for the Medicaid program are "used for making payments to States which have submitted, and had approved by the Secretary [of the United States Department of Health and Human Services], State plans for medical assistance." 42 U.S.C. § 1396-1 ; see also 42 C.F.R. § 430.10. The Agency administers Alabama's State Plan. See Ala. Admin. Code (Alabama Medicaid Agency), r. 560-X-1-.02 ;2 see also Ala. Code 1975, § 22-6-150(6). The Agency is authorized to "adopt rules necessary ... to administer the Alabama Medicaid Program in a manner consistent with state and federal law ...." Ala. Code 1975, § 22-6-164 ; see also 42 U.S.C. § 1396a (discussing state-plan requirements and options).
As the Supreme Court summarized in Schweiker v. Gray Panthers, 453 U.S. 34, 36-38, 101 S.Ct. 2633, 69 L.Ed.2d 460 (1981) :
"The Medicaid program, established in 1965 as Title XIX of the Social Security Act (Act), 79 Stat. 343, as amended, 42 U.S.C. § 1396 et seq. (1976 ed. and Supp. III), ‘provid[es] federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons.’ Harris v. McRae, 448 U.S. 297, 301 [100 S.Ct. 2671, 65 L.Ed.2d 784] (1980). Each participating State develops a plan containing ‘reasonable standards ... for determining eligibility for and the extent of medical assistance.’ 42 U.S.C. § 1396a(a)(17). An individual is entitled to Medicaid if he fulfills the criteria established by the State in which he lives. State Medicaid plans must comply with requirements imposed both by the Act itself and by the Secretary of Health and Human Services (Secretary). See id., § 1396a (1976 ed. and Supp. III).
"....
"As originally enacted, Medicaid required participating States to provide medical assistance to ‘categorically needy’ individuals who received cash payments under one of four welfare programs established elsewhere in the Act. See § 1396a(a)(10) (1970 ed.). The categorically needy were persons whom Congress considered especially deserving of public assistance because of family circumstances, age, or disability. States, if they wished, were permitted to offer assistance also to the ‘medically needy’ -- persons lacking the ability to pay for medical expenses, but with incomes too large to qualify for categorical assistance. In either case, the Act required the States to base assessments of financial need only on ‘such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant or recipient.’ § 1396a(a)(17)(B) (emphasis added). Specifically, eligibility decisions could ‘not take into account the financial responsibility of any individual for any applicant or recipient of assistance ... unless such applicant or recipient is such individual's spouse’ or minor, blind, or disabled child. § 1396a(a)(17)(D).
"Believing it reasonable to expect an applicant's spouse to help pay medical expenses, some States adopted plans that considered the spouse's income in determining Medicaid eligibility and benefits. These States calculated an amount considered necessary to pay the basic living expenses of the spouse and ‘deemed’ any of the spouse's remaining income to be ‘available’ to the applicant, even where the applicant was institutionalized and thus no longer living with the spouse.
"....
"In 1972, Congress replaced three of the four categorical assistance programs with a new program called Supplemental Security Income for the Aged, Blind, and Disabled (SSI), 42 U.S.C. § 1381 et seq., Pub. L. 92–603, 86 Stat. 1465. Under SSI, the Federal Government displaced the States by assuming responsibility for both funding payments and setting standards of need."
(Footnotes omitted.) See also Alabama Medicaid Agency v. Primo, 579 So. 2d 1355, 1357 (Ala. Civ. App. 1991).
In 1988, Congress enacted The Medicare Catastrophic Coverage Act ("the MCCA"), which amended portions of the statutes governing the federal Medicare program, see 42 U.S.C. § 1395 et seq. (Title XVIII of the Social Security Act), and the Medicaid program. See Pub. L. No. 100-360, 102 Stat. 683 (1988). Regarding the latter, 42 U.S.C. § 1396r–5 was enacted, in part, to provide certain protections to a noninstitutionalized spouse ("the community spouse," as defined in 42 U.S.C. § 1396r-5(h)(2) ) when the other spouse is institutionalized ("the institutionalized spouse," as defined in 42 U.S.C. § 1396r-5(h)(1) ) in a nursing facility or medical institution. See Wisconsin Dep't of Health & Family Servs. v. Blumer, 534 U.S. 473, 480, 122 S.Ct. 962, 151 L.Ed.2d 935 (2002) (quoting H.R. Rep. No. 100–105, pt. 2, p. 65 (1987)). In summarizing the history behind the enactment of the MCCA, the United States Supreme Court stated:
"Because spouses typically possess assets and income jointly and bear financial responsibility for each other, Medicaid eligibility determinations for married applicants have resisted simple solutions. See, e.g., [Schweiker v. Gray Panthers], [453 U.S.] at 44–48 [101 S.Ct. 2633, 69 L.Ed.2d 460 (1981) ]. Until 1989, the year the MCCA took effect, States generally considered the income of either spouse to be ‘available’ to the other. We upheld this approach in [ Schweiker ], observing that ‘from the beginning of the Medicaid program, Congress authorized States to presume spousal support.’ Id., at 44 ; see id., at 45 (quoting passage from S. Rep. No. 404, 89th Cong., 1st Sess., pt. 1, p. 78 (1965), U.S. Code Cong. & Admin. News 1965, pp. 1943, 2018, including statement that ‘it is proper to expect spouses to support each other’). Similarly, assets held jointly by the couple were commonly deemed ‘available’ in full to the institutionalized spouse.
"At the same time, States generally did not treat resources held individually by the community spouse as available to the institutionalized spouse. Accordingly, assets titled solely in the name of the community spouse often escaped consideration in determining the institutionalized spouse's Medicaid eligibility. See H.R. Rep. No. 100-105, pt. 2, pp. 66-67 (1987).
"As Congress later found when it enacted the MCCA in 1988, these existing practices for determining a married applicant's income and resources produced unintended consequences. Many community spouses were left destitute by the drain on the couple's assets necessary to qualify the institutionalized spouse for Medicaid and by the diminution of the couple's income posteligibility to reduce the amount payable by Medicaid for institutional care. See id., at 66-68 . Conversely, couples with ample means could qualify for assistance when their assets were held solely in the community spouse's name.
"In the MCCA Congress sought to protect community spouses from ‘pauperization’ while preventing financially secure couples from obtaining Medicaid assistance. See id., at 65 (bill seeks to ‘end th[e] pauperization’ of the community spouse ‘by assuring that the community spouse has a sufficient -- but not excessive -- amount of income and resources available’). To achieve this aim, Congress installed a set of intricate and interlocking requirements with which States must comply in allocating a couple's income and resources.
"Income allocation is governed by §§ 1396r–5(b) and (d). Covering any month in which ‘an institutionalized spouse is
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