Poindexter v. State
| Decision Date | 03 April 2008 |
| Docket Number | No. 104853.,104853. |
| Citation | 890 N.E.2d 410,229 Ill.2d 194 |
| Parties | Robert N. POINDEXTER et al., Appellants, v. The STATE of Illinois, Acting Through the DEPARTMENT OF HUMAN SERVICES, et al., Appellees. |
| Court | Illinois Supreme Court |
Duane D. Young, Dawn D. Behnke, of LaBarre, Young & Behnke, Springfield, for appellants.
Lisa Madigan, Attorney General, Springfield (Michael A. Scodro, Solicitor General, Carl J. Elitz, Elaine Wyder-Harshman, Assistant Attorneys General, Chicago, of counsel), for appellees.
This appeal arises out of the state's administrative efforts to recover from plaintiffs costs of their respective spouses' nursing home care. Rather than exhausting administrative remedies, plaintiffs filed a suit for declaratory and injunctive relief in the circuit court of Sangamon County. They asserted that the state spousal support provisions (305 ILCS 5/10-1 through 10-28 (West 2006); 89 Ill. Adm.Code § 103.10 et seq.) were preempted by the Medicare Catastrophic Coverage Act of 1988 (MCCA) (42 U.S.C. § 1396r-5 (2000)). The circuit court found in favor of plaintiffs and enjoined the state from seeking spousal support. The appellate court reversed over a dissent. 372 Ill.App.3d 1021, 311 Ill.Dec. 465, 869 N.E.2d 139. We granted plaintiffs leave to appeal (210 Ill.2d R. 315(a)) and affirm the appellate court.
We first discuss the federal provision at issue, then the state provision that is allegedly in conflict with it, and then the specific procedural facts of this case.
Medicaid is a cooperative federal-state program authorized under Title XIX of the Social Security Amendments of 1965 (42 U.S.C. § 1396 et seq.). It provides medical services to both the categorically needy and the medically needy. Hines v. Department of Public Aid, 221 Ill.2d 222, 227, 302 Ill.Dec. 711, 850 N.E.2d 148 (2006). Under prior law, a couple needed to deplete nearly all of their assets before either one could satisfy Medicaid eligibility requirements, leaving the spouse who remained in the community in a financially precarious position. H.R.Rep. No. 100-105, at 69 (1988), reprinted in 1988 U.S.C.C.A.N. 857, 892. In 1988, Congress attempted to fix the Medicaid system to prevent "spousal impoverishment." 42 U.S.C. § 1396r-5 (2000); Hines, 221 Ill.2d at 228, 302 Ill.Dec. 711, 850 N.E.2d 148. The MCCA provided a formula for allowing the institutionalization of one spouse, while keeping the spouse remaining in the community some distance from the poverty line. H.R.Rep. No. 100-105, at 69 (1988), reprinted in 1988 U.S.C.C.A.N. 857, 892.
Another goal of the MCCA was "preventing financially secure couples from obtaining Medicaid assistance." Wisconsin Department of Health & Family Services v. Blumer, 534 U.S. 473, 480, 122 S.Ct. 962, 967, 151 L.Ed.2d 935, 944 (2002), citing H.R.Rep. No. 100-105, at 65 (1988), reprinted in 1988 U.S.C.C.A.N. 857, 888. The MCCA prevented an "institutionalized spouse" from qualifying for Medicaid by transferring his or her interest in assets to the "community spouse." See H.R.Rep. No. 100-105, at 73-74 (1988), reprinted in 1988 U.S.C.C.A.N. 857, 896-97; Johnson v. Guhl, 91 F.Supp.2d 754, 761 (D.N.J. 2000) (). Therefore, the MCCA tried to balance two goals: "preventing impoverishment of the community spouse and ensuring that no one avoided contributing his or her fair amount to medical care." Thomas v. Commissioner of the Division of Medical Assistance, 425 Mass. 738, 740, 682 N.E.2d 874, 876 (1997).
To determine eligibility under these provisions, the state agency takes a "snapshot" of the couple's total current and forecasted resources and income as of the beginning of the first continuous period of institutionalization. See H.R.Rep. No. 100-105, at 73-74 (1988), reprinted in 1988 U.S.C.C.A.N. 857, 896-97; Mistrick v. Division of Medical Assistance & Health Services, 154 N.J. 158, 171, 712 A.2d 188, 195 (1998); 42 U.S.C. § 1396r-5(c)(1)(A) (2000). Based on this snapshot, the agency attributes the couple's resources and income into spousal shares by a process of "deeming" and "diversion." See M. Farley, When "I Do" Becomes "I Don't": Eliminating the Divorce Loophole to Medicaid Eligibility, 9 Elder L.J. 27 (2001) ().
The MCCA's provisions consider both income and resources in determining an applicant's eligibility. Blumer, 534 U.S. at 481, 122 S.Ct. at 967, 151 L.Ed.2d at 944. Under the income category, the institutionalized spouse's income cannot exceed the maximum level set by the state. However, the community spouse's income may not be "deemed available" to the institutionalized spouse in determining eligibility. 42 U.S.C. § 1396r-5(b)(1) (2000). This is often called the "name-on-the-check" rule. Blumer, 534 U.S. at 481, 122 S.Ct. at 967, 151 L.Ed.2d at 944. Under this rule, a community husband's income that he retains for himself will not, under state law, be counted against (or "deemed available" to) his institutionalized spouse at the eligibility phase of the Medicaid process. Cf. Schweiker v. Gray Panthers, 453 U.S. 34, 44, 101 S.Ct. 2633, 2640, 69 L.Ed.2d 460, 470 (1981).
Next, the eligibility rules look at a couple's total resources. The state agency evaluates a couple's assets collectively, regardless of ownership. This collective evaluation of the couple's assets closed the loophole that allowed the couple to shelter resources solely in the name of the community spouse. A couple's total resources must be below a certain statutorily prescribed level called the "Community Spouse Resource Allowance" (CSRA) before the institutionalized spouse will be eligible. If the total resources are above this limit, the couple must "spend down" to gain eligibility. Houghton v. Reinertson, 382 F.3d 1162, 1165 (10th Cir.2004); 42 U.S.C. § 1396r-5(c)(2) (2000).1
The CSRA also diverts some of the institutionalized spouse's resources where the community spouse has little of his or her own resources. This may occur in the common case of a spouse who spent his or her entire career working in the home. To avoid having to "spend down" the entirety of a couple's assets to qualify the institutionalized spouse for Medicaid and thus impoverish himself or herself in the process, the community spouse is allowed to keep the CSRA. 42 U.S.C. § 1396r-5(f)(2) (2000). In other words, the state agency diverts some of the institutionalized spouse's assets to the community spouse to prevent spousal impoverishment. Conversely, if the community spouse retains most of the wealth, then his or her assets must be "spent down" only to the point of the CSRA.
The MCCA also provides diversion procedures regarding the couple's income to prevent spousal impoverishment. Once eligibility is reached, the state agency reexamines the ailing spouse's income to determine how much must be contributed toward nursing home costs and whether any of it should be left available to the community spouse. The institutionalized spouse is permitted to divert a portion of monthly income to the community spouse. This deduction from the institutionalized spouse's monthly income is known as the "community spouse monthly income allowance" (CSMIA). 42 U.S.C. § 1396r-5(d)(1)(B) (2000). If the community spouse's income falls below the "minimum monthly maintenance needs allowance" (MMMNA), the agency allocates a portion of the institutionalized spouse's income to the community spouse. 42 U.S.C. § 1396r-5(d)(3) (2000).2 Thus, if the name-on-the-check rule does not provide the community spouse with this measure of sufficient income, the agency must look to the institutionalized spouse's income to bring the community spouse's income up to the MMMNA. 42 U.S.C. § 1396r-5(d)(6) ).
Finally, the MCCA provides a "fair hearing" procedure through which a couple may challenge the results of the state agency's "snapshot." At the fair hearing, also known as an "(e)(2)(C) hearing," the state agency can address any dissatisfaction with the CSRA and the MMMNA. 42 U.S.C. § 1396r-5(e)(2)(C) (2000). For example, Blumer, 534 U.S. at 483-84, 122 S.Ct. at 969, 151 L.Ed.2d at 946.
After the institutionalized spouse has received benefits, a state agency may seek recovery of nursing home costs from the community spouse. Other states refer to this as a "pay and chase" system. Cf. 372 Ill.App.3d at 1034, 311 Ill.Dec. 465, 869 N.E.2d 139 (). The State of Illinois' spousal support provisions are found in article X of the Illinois Public Aid Code (305 ILCS 5/10-1 through 10-28 (West 2006)). When one spouse receives Public Aid, the other spouse is liable to the agency providing the benefits. 305 ILCS 5/10-2 (West 2006). Section 10-11 of the Code provides that if the appropriate state agency determines that a spouse owes support, the collections unit of that agency may issue an administrative order reflecting the amount owed to the state as reimbursement. 305 ILCS 5/10-11 (West 2006).
The regulations promulgated by the state provide that the Illinois Department of Human Services ...
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