LOCATION: Rhode Island District Court
DOCKET NO.: 85-632
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: Massachusetts Supreme Judicial Court
CITATION: 477 US 154 (1986)
ARGUED: Apr 21, 1986
DECIDED: Jun 23, 1986
H. Reed Witherby - on behalf of Petitioner
Jerrold J. Ganzfried - on behalf of the United States, as amicus curiae, in support of Petitioner
Rene H. Reixach, Jr. - on behalf of Respondents
Facts of the case
Media for Atkins v. Rivera
Audio Transcription for Oral Argument - April 21, 1986 in Atkins v. Rivera
Warren E. Burger:
Thank you gentlemen, the case is submitted.
We will hear arguments next in Atkins against Rivera.
Mr. Witherby, I think you may begin whenever you're ready.
H. Reed Witherby:
Thank you, Mr. Chief Justice, and may it please the Court.
The issue is this case is whether a 1982 amendment to the Medicaid statute makes it unlawful for states to use a six month spenddown for determining Medicaid eligibility for the medically needy.
The spenddown is the mechanism by which applicants who have more income than is necessary to provide their basic subsistence needs may still become eligible for Medicaid after applying their excess income to medical costs.
It operates essentially like the deductible in a health insurance policy.
Since 1966, the Secretary of Health, Education and Welfare, and after him the Secretary of Health and Human Services, have authorized states to use a period of six months for determining the amount of the spenddown, and most states which have chosen to extend their Medicaid coverage to the medically needy have done so on that basis.
The Massachusetts Supreme Judicial Court, however, ruled below that a 1982 amendment to the Medicaid statute requires states to use a one month spenddown.
The Supreme Judicial Court based its decision upon interpretation of the federal Medicaid statute which has since been explicitly rejected by the United States Court of Appeals for the First Circuit and the United States Court of Appeals for the Second Circuit.
The decision below is wrong because it ignores the Language and Legislative history of the 1982 amendment and the Secretary's regulation which was adopted and is maintained under an express delegation of authority which has never been amended.
This case presents a pure issue of federal statutory construction, and the most important facts relate to the structure of the Medicaid program.
Medicaid provides federal financial assistance to states which choose to pay for medical care for certain groups of needy individuals.
States that elect to participate in the program must provide Medicaid coverage to the categorically needy, that is those individuals who are receiving cash assistance under either of the two major federal categorical welfare programs, the AFDC program for families with dependent children, or the supplemental security income program for the aged, blind, or disabled.
Individuals who are receiving cash assistance under either of these programs have only enough income to meet their basic maintenance needs for food, clothing, and shelter, and have nothing left over to pay for medical care.
They are automatically eligible for Medicaid without a spenddown.
Participating states are not required as a general matter to provide Medicaid benefits to any other group of individuals.
However, states may choose to provide benefits to one or more optional categories, the most significant of which is known as the medically needy.
In order to qualify as medically needy, it is necessary first to meet the categorical requirements for either AFDC or SSI, in this case AFDC.
Need for medical assistance under the medically needy program may be established in one of two ways:
First, since the medically needy income standard, the means test established under the medically needy program, is often higher than the means test for AFDC, eligibility may be established on the basis of income.
Alternatively, an applicant who has income in excess of the medically needy income standard may still qualify as medically needy on the basis of his or her medical costs.
This process, which applies only to Medicaid applicants who have already been determined to be ineligible on the basis of their income, is known as the spenddown.
For example, the first named plaintiff in this case, Ms. Rivera, had net income of about $100 a month more than the medically needy income standard for a month.
Her spenddown liability, in the nature of a deductible, was six times that amount or about $600, and applied for a six month period.
If she had incurred $600 of medical costs at any point during the six month period, Medicaid would have paid for any further medical costs during the period.
However, Ms. Rivera incurred medical costs of only $314 and therefore Medicaid paid for none of those costs.
It happened that the entire $314 was incurred during one month.
Under a one-month spenddown, Ms. Rivera would have been liable only for the first $100 and Medicaid would have paid the remainder.
The amount of the spenddown deductible is what is at issue in this case.