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WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES v. BLUMER - 534 U.S. 473 (2002)
OCTOBER TERM, 2001
WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES v. BLUMER
CERTIORARI TO THE COURT OF APPEALS OF WISCONSIN
No. 00-952. Argued December 3, 200l-Decided February 20, 2002
In developing standards for determining Medicaid eligibility, participating States must "tak[e] into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary [of Health and Human Services (Secretary)], available to the applicant." 42 U. S. C. § 1396a(a)(17)(B) (emphasis added). 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. Until the Medicare Catastrophic Coverage Act of 1988 (MCCA or Act), state standards often left a spouse living at home (called the "community spouse") destitute, the couple's assets drained to qualify his or her mate (the "institutionalized spouse") for Medicaid, and the couple's posteligibility income diminished to reduce the amount payable by Medicaid for institutional care. The MCCA's "spousal impoverishment" provisions responded to this problem by including in the Medicaid statute requirements with which States must comply in allocating a couple's income and resources. The Act's income allocation rules direct that, in any month in which one spouse is institutionalized, "no income of the community spouse shall be deemed available to the institutionalized spouse," § 1396r-5(b)(1); require States to set for the community spouse a "minimum monthly maintenance needs allowance" (MMMNA), § 1396r-5(d)(3); and prescribe that, if the community spouse's posteligibility income is insufficient to yield income equal to or above the MMMNA, the shortfall-called the "community spouse monthly income allowance" (CSMIA)-may be deducted from the institutionalized spouse's income and paid to the community spouse, § 1396r-5(d)(1)(B). The MCCA's resource allocation rules provide, inter alia, that, in determining the institutionalized spouse's Medicaid eligibility, a portion of the couple's resources-called the "community spouse resource allowance" (CSRA)-shall be reserved for the benefit of the community spouse, § 1396r-5(c)(2). To calculate the CSRA, the couple's jointly and separately owned resources are added together as of the time the institutionalized spouse's institutionalization commenced; half of that total, subject to certain limits, is then allocated to the community spouse, §§ 1396r-5(c)(1)(A), (2)(B), (f)(2)(A), (g). The CSRA is deemed unavailable to the institutionalized
474 WISCONSIN DEPT. OF HEALTH AND FAMILY SERVS.
spouse in the eligibility determination, but all resources above the CSRA (excluding a $2,000 personal allowance reserved for the institutionalized spouse under federal regulations) must be spent before eligibility can be achieved, § 1396r-5(c)(2). Section 1396r-5(e)(2)(C) provides a "fair hearing" mechanism through which a couple may obtain a higher CSRA by establishing that the standard CSRA (in relation to the amount of income it generates) is inadequate to raise "the community spouse's income" to the MMMNA. The States have employed two methods for making this determination; the two methods differ in their construction of the subsection (e)(2)(C) term "community spouse's income." Under the "income-first" method used by most States, "community spouse's income" includes not only the community spouse's actual income at the time of the eligibility hearing, but also an anticipated posteligibility CSMIA authorized by § 1396r-5(d)(1)(B). The incomefirst method, because it takes account of the potential CSMIA, makes it less likely that the CSRA will be increased; it therefore tends to require couples to expend additional resources before the institutionalized spouse becomes Medicaid eligible. In contrast, the "resourcesfirst" method employed in the remaining States excludes the CSMIA from consideration. The Secretary has circulated for comment a proposed rule allowing States the threshold choice of using either the income-first or resources-first method.
Mter entering a Wisconsin nursing home, respondent Irene Blumer applied for Medicaid through her husband Burnett. The Green County Department of Human Services (County) determined that the Blumers could retain $74,822 in assets-$72,822 as Burnett's standard CSRA and $2,000 as Irene's personal allowance. The County next found that, as of the date of Irene's application, the couple possessed resources exceeding their $74,822 limit by $14,513. The County accordingly concluded that Irene would not be eligible for Medicaid until the couple's spending reduced their resources by the $14,531 amount. Irene sought a hearing to obtain a higher CSRA, arguing that, because Burnett's monthly income ($1,639) fell below the applicable MMMNA ($1,727), the hearing examiner was obliged to increase Burnett's CSRA. Because a Wisconsin statute adopts the income-first rule, the examiner concluded that he lacked authority to increase Burnett's CSRA: The difference between Burnett's posteligibility income and the MMMNA could be erased if, after achieving eligibility, Irene transferred to Burnett, as a CSMIA, a portion of her monthly income. Because Irene's posteligibility income would be sufficient to allow the transfer, the examiner found no reason to reserve additional assets for Burnett and, consequently, no cause for advancing Irene's Medicaid eligibility. The Circuit Court affirmed, but
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