Atkins v. Rivera

Background

A Massachusetts woman who earned slightly more than the state’s cash-assistance limit applied for Medicaid but was told she had to “spend down” six months’ worth of excess income on medical bills before qualifying. Massachusetts uses a six-month period to compute that spenddown. The state’s highest court held that the federal law’s requirement that states use the “same methodology” as cash-assistance programs meant a one-month period had to be used instead. The woman sued and a class of similarly situated people was certified.

Reasoning

The Court faced the question whether federal law or the Secretary of Health and Human Services allows states to use a six-month spenddown period for the medically needy. The Court explained that Congress intended the “same methodology” language to prevent divergence in how income components (like interest or support payments) are treated, not to fix how many months a spenddown period must last. The federal regulation permitting a prospective period of up to six months was adopted under the Secretary’s explicit rulemaking authority. The Court held that the agency’s interpretation is reasonable and controls unless it is arbitrary, so Massachusetts may use a six-month spenddown.

Real world impact

The ruling lets Massachusetts and other states that follow the same federal rule require medically needy people to accumulate up to six months of medical expenses before Medicaid coverage begins. It affirms the federal agency’s long-standing regulation and preserves state flexibility in setting spenddown periods. The decision reverses the state high court’s requirement that a one-month period be used.