The U.S. Court of Appeals upholds Ohio's use of the "income first" rule in raising a community spouse's resource allowance.
Robert Chambers and his wife, Jean, along with another couple, filed a class action against the Ohio Department of Human Services alleging that the Department improperly applied the "income first" rule in determining Medicaid eligibility. In cases where the community spouse needs additional support from the institutionalized spouse in order to meet the minimum monthly maintenance needs allowance, the Department required nursing home residents to transfer income to the community spouse before transfering resources. The couples also claimed that the Department failed to properly notify Medicaid applicants and their spouses of the procedures and requirements for obtaining Medicaid benefits. In 1995, the district court ruled that the "plain meaning" of the federal Medicaid law required a resource-first approach to determining an applicant's eligibility and that the Department failed to properly notify applicants. The Department appealed this ruling, as well as a subsequent injunction.
Where the district court found "plain meaning," the U.S. Court of Appeals finds ambiguity--"at best." While subsections (b) and (d) of § 1396r-5 of the Medicaid statute, which address the transfer of income between spouses, fail to set forth conditions for the transfer of income prior to eligibility, neither do they expressly prohibit such a transfer, the court rules. The court further holds that the law expressly calls for the determination of resources at the pre-eligibility phase in order to prevent depletion of the couple's joint resources in qualifying for Medicaid. Although this is not a concern regarding income, the court determines that this distinction should not limit whether income may be transferred pre-eligibility. Finding the statute to be ambiguous, the court rules that the Department's interpretation is reasonable.
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