Herweg v. Ray

1983-10-31

Headline: Medicaid spouse-income rules upheld: Court allows federal limits on states’ ability to count a separated spouse’s income, forcing Iowa to follow federal one‑ and six‑month deeming limits rather than open‑ended counting.

Holding: The Court reversed the lower court and held that the federal agency may limit how long states may count a noninstitutionalized spouse’s income, requiring Iowa to follow the Secretary’s one‑ and six‑month deeming rules.

Real World Impact:

Limits how long states can count a non‑living spouse’s income — one month or six months.
Iowa cannot force individualized income determinations that conflict with federal Medicaid rules.
States may still sue spouses for reimbursement under family‑responsibility laws.

Topics: Medicaid eligibility, spouse income rules, SSI program, state versus federal rules

Summary

Background

A hospitalized, comatose woman was placed in long‑term care and her husband applied for Medicaid on her behalf. Iowa used a state formula to treat some of the husband’s pay as if it were available to his wife. That state practice conflicted with a federal regulation that limits how long a state may count a noninstitutionalized spouse’s income after spouses stop living together.

Reasoning

The central question was whether the federal agency in charge of Medicaid (the Secretary) could set rules that limit how long states may “deem” a spouse’s income as available. The Court said yes. It relied on the statute that lets the Secretary define what income is “available” and concluded the agency’s one‑month and six‑month time limits are reasonable and not arbitrary. The Court reversed the lower court and rejected the idea that every case requires a new, individualized factual hearing about how much spouse income is truly available.

Real world impact

As a result, states that follow the SSI approach must apply the federal one‑ and six‑month rules rather than use indefinite deeming. Families with an institutionalized spouse and state officials will see shorter windows for counting the other spouse’s income. States can still try to recover costs through family‑support lawsuits, but they may not impose open‑ended income attribution that the federal rule forbids.

Dissents or concurrances

A concurring justice agreed with the result but criticized some of the Court’s language. The dissent argued Congress intended to let states require spouses to support each other and would have allowed broader state deeming authority.