New York Law Review

Tag: Spousal Impoverishment

  • Balzarini v. Suffolk County Department of Social Services, 13 N.Y.3d 136 (2009): Limits on Increasing Medicaid Income Allowance for Community Spouse

    Balzarini v. Suffolk County Department of Social Services, 13 N.Y.3d 136 (2009)

    Under the spousal impoverishment provisions of the Medicare Catastrophic Coverage Act (MCCA), “exceptional circumstances” causing “significant financial distress” do not include everyday living expenses exceeding the minimum monthly maintenance needs allowance (MMMNA), as the MMMNA is designed to cover such ordinary expenses.

    Summary

    John Balzarini entered a nursing home and applied for Medicaid. His wife, Frances, sought an increase in the MMMNA to cover her living expenses, arguing “exceptional circumstances” resulted in her “significant financial distress.” The New York State Department of Health (DOH) denied the increase, finding her expenses were ordinary and should be covered by the MMMNA. The Court of Appeals reversed the Appellate Division’s decision, holding that the MMMNA is intended to cover ordinary living expenses, and the spousal impoverishment provisions are not meant to subsidize a community spouse’s prior lifestyle.

    Facts

    John Balzarini (husband) entered a nursing home in March 2005 and applied for Medicaid. His monthly income was $2,542.67. Frances Balzarini (wife) had a monthly income of $2,444.77. The Suffolk County Department of Social Services (DSS) determined that $2,414.47 of the husband’s income was available for nursing home expenses. The wife submitted a spousal refusal letter. DSS did not allocate any of the husband’s income to the wife because her income exceeded the MMMNA ($2,378 in 2005). The wife claimed monthly living expenses of approximately $4,800, including mortgage payments, utilities, food, and a $1,500 credit card payment on a balance between $25,000 and $30,000 incurred before the husband entered the nursing home.

    Procedural History

    The husband contested DSS’s determination in a fair hearing before an administrative law judge on behalf of the DOH. DOH affirmed DSS’s determination. The husband then brought a CPLR article 78 proceeding in Supreme Court, which transferred the case to the Appellate Division. The Appellate Division concluded the wife’s recurring monthly expenses, except for credit card expenses, were “all necessities of daily living” and that “reasonable, ordinary expenses can be a sufficient basis upon which additional income of the institutionalized spouse may be made available to the community spouse” (55 AD3d 187, 191, 194 [2d Dept 2008]). The Appellate Division remitted the matter to DOH to recalculate the MMMNA. DSS and DOH appealed to the Court of Appeals.

    Issue(s)

    Whether “exceptional circumstances” causing “significant financial distress” within the meaning of the joint federal-state Medicaid program include everyday living expenses exceeding the MMMNA.

    Holding

    No, because “exceptional circumstances” causing “significant financial distress” do not encompass everyday living expenses exceeding the MMMNA.

    Court’s Reasoning

    The Court of Appeals reasoned that the spousal impoverishment provisions of the MCCA were designed to ensure the community spouse retains necessary income and assets without being reduced to penury. The MMMNA is set at a level Congress deemed sufficient to cover basic living expenses. The Court emphasized that an increase in the MMMNA is available “only to alleviate true financial hardship that is thrust upon the community spouse by circumstances over which he or she has no control” (85 NY2d at 325). The wife’s expenses were considered ordinary living expenses that the MMMNA was intended to cover. Quoting the Centers for Medicare and Medicaid Services, the court noted that “exceptional circumstances” are those “[c]ircumstances other than those taken into account in establishing maintenance standards for spouses.” The court stated plainly, “the spousal impoverishment provisions are not meant to enable the community spouse ‘to maintain [his or] her prior life-style and have the public subsidize it’” (86 NY2d 47, 52). The narrow purpose of the MMMNA is “to protect the community spouse from financial disaster when the primary income-providing spouse [becomes] institutionalized” (Schachner, 85 NY2d at 323). The Court concluded that the wife did not demonstrate “significant financial distress” caused by “exceptional circumstances,” and substantial evidence supported DOH’s denial of an increase in the MMMNA.

  • In re Estate of Tomeck, 8 N.Y.3d 724 (2007): Social Security Benefits and Medicaid Eligibility

    In re Estate of Tomeck, 8 N.Y.3d 724 (2007)

    A state’s policy of considering an institutionalized spouse’s Social Security benefits when determining the community spouse’s Medicaid eligibility does not violate the Social Security Act’s anti-alienation provision.

    Summary

    The Saratoga County Department of Social Services sought to recover Medicaid payments made for John Tomeck from his wife Margaret’s estate and trust. The New York Court of Appeals addressed whether New York’s “income-first” policy, which considers Social Security benefits when determining Medicaid eligibility for the community spouse, violates the Social Security Act’s anti-alienation provision. The court held that it does not, reasoning that attribution of Social Security benefits for Medicaid eligibility determination does not constitute “legal process” targeting those benefits.

    Facts

    John Tomeck applied for Medicaid in 1996. The County DSS denied the application, citing excess resources and income based on the spousal impoverishment provisions of the Medicaid Act. John requested a fair hearing, arguing his wife’s Community Spouse Resource Allowance (CSRA) should be increased. He also filed a spousal refusal, stating his wife needed all income and assets to support herself and would not contribute to his care. The wife’s monthly income was $1,072.24 and the husband’s was $1,121.75. The MMMNA was $1,976, producing a CSMIA of $903.76. Applying the income-first method, the County DSS attributed $903.76 of the husband’s income to the wife. In 2001, the wife transferred the marital home to an irrevocable trust she had established in 1996. She died in 2002, and the County DSS filed a claim against her estate for $309,449.03 for Medicaid benefits paid to her husband.

    Procedural History

    The Surrogate’s Court denied the County DSS’s motion for summary judgment and dismissed its claim, holding that attributing the husband’s Social Security benefits violated the anti-alienation provision. The Appellate Division affirmed. The Court of Appeals granted the County DSS’s motion for permission to appeal.

    Issue(s)

    Whether New York’s income-first policy, which considers an institutionalized spouse’s Social Security benefits when determining the community spouse’s Medicaid eligibility, violates the Social Security Act’s anti-alienation provision (42 U.S.C. § 407(a)).

    Holding

    No, because attribution of the institutionalized spouse’s Social Security benefits to the community spouse for Medicaid eligibility determination does not constitute “execution, levy, attachment, garnishment, or other legal process” against those benefits, as prohibited by the anti-alienation provision.

    Court’s Reasoning

    The Court of Appeals distinguished its ruling from the Second Circuit’s decision in Robbins v. DeBuono, which had held that New York’s income-first policy violated the anti-alienation provision. The Court relied on the Supreme Court’s subsequent decision in Washington State Dept. of Social & Health Servs. v. Guardianship Estate of Keffeler, which emphasized a “restrictive” interpretation of “other legal process.” The Court in Keffeler held that “other legal process” requires utilization of some judicial or quasi-judicial mechanism, though not necessarily an elaborate one, by which control over property passes from one person to another in order to discharge or secure discharge of an allegedly existing or anticipated liability. The Court reasoned that attribution does not vest the local social services agency with control over the institutionalized spouse’s Social Security benefits. It is simply a budgeting methodology used to determine Medicaid eligibility. The Court stated, “While married couples are faced with a difficult decision when choosing whether to spend down or pursue a spousal refusal, they do have a choice. The MCCA safeguards the community spouse from impoverishment; it does not guarantee that the community spouse can keep all the couple’s assets or maximize the community spouse’s wealth, or prevent the government from seeking to recoup Medicaid benefits when a spouse chooses to retain assets rather than spend down.”