Schweiker v. Gray Panthers

delivered the opinion of the Court.

The Medicaid program provides federal funds to States that pay for medical treatment for the poor. An individual’s entitlement to Medicaid benefits depends on the financial resources “available” to him. Some States determine eligibility by assuming — “deeming”—that a portion of the spouse’s income is “available” to the applicant. “Deeming” thus has the effect of reducing both the number of eligible individuals and the amount of assistance paid to those who qualify. The question in this case is whether the federal regulations that permit States to “deem” income in this manner are arbitrary, capricious, or otherwise unlawful.

I

The Medicaid program, established in 1965 as Title XIX of the Social Security Act (Act), 79 Stat. 343, as amended, 42 U. S. C. § 1396 et seq. (1976 ed. and Supp. III), “provid[es] federal financial assistance to States that choose to reimburse certain costs of medical treatment for needy persons.” Harris v. McRae, 448 U. S. 297, 301 (1980). Each participating State develops a plan containing “reasonable standards . . . for determining eligibility for and the extent of medical assistance.” 42 U. S. C. § 1396a (a) (17). An individual is entitled to Medicaid if he fulfills the criteria established by the State in which he lives. State Medicaid plans must comply with requirements imposed both by the Act itself and by the Secretary of Health and Human Services (Secretary). See § 1396a (1976 ed. and Supp. III).

A

As originally enacted, Medicaid required participating States to provide medical assistance to “categorically needy” individuals who received cash payments under one of four welfare programs established elsewhere in the Act. See § 1396a (a) (10) (1970 ed.). The categorically needy were persons whom Congress considered especially deserving of public assistance because of family circumstances, age, or disability.1 States, if they wished, were permitted to offer assistance also to the “medically needy”- — persons lacking the ability to pay for medical expenses, but with incomes too large to qualify for categorical assistance. In either case, the Act required the States to base assessments of financial need only on “such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant or recipient.” § 1396a (a) (17) (B) (emphasis added). Specifically, eligibility decisions could “not take into account the financial responsibility of any individual for any applicant or recipient of assistance . .. unless such applicant or recipient is such individual’s spouse” or minor, blind, or disabled child. § 1396a (a) (17) (D).

Believing it reasonable to expect an applicant’s spouse to help pay medical expenses, some States adopted plans that considered the spouse’s income in determining Medicaid eligibility and benefits.2 These States calculated an amount considered necessary to pay the basic living expenses of the spouse and “deemed” any of the spouse’s remaining income to be “available” to the applicant, even where the applicant was institutionalized and thus no longer living with the spouse.

B

In 1972, Congress replaced three of the four categorical assistance programs with a new program called Supplemental Security Income for the Aged, Blind, and Disabled (SSI), 42 U. S. C. § 1381 et seq., Pub. L. 92-603, 86 Stat. 1465.3 Under SSI, the Federal Government displaced the States by assuming responsibility for both funding payments and setting standards of need. In some States the number of individuals eligible for SSI assistance was significantly larger than the number eligible under the earlier, state-run categorical need programs.

The expansion of general welfare accomplished by SSI portended increased Medicaid obligations for some States because Congress retained the requirement that all recipients of categorical welfare assistance — now SSI — were entitled to Medicaid. Congress feared that these States would withdraw from the cooperative Medicaid program rather than expand their Medicaid coverage in a manner commensurate with the expansion of categorical assistance. “[I]n order not to impose a substantial fiscal burden on these States” or discourage them from participating, see S. Rep. No. 93-553, p. 56 (1973), Congress offered what has become known as the “§ 209 (b) option.” 4 Under it, States could elect to provide Medicaid assistance only to those individuals who would have been eligible under the state Medicaid plan in effect on January 1, 1972.5 States thus became either “SSI States” or “§ 209 (b) States” depending on the coverage that they offered.6

The Secretary promulgated regulations governing the administration of Medicaid benefits in both SSI States and § 209 (b) States. The regulations described the circumstances in which the income of one spouse may be “deemed” available to the other. In SSI States, “deeming” is conducted in the following manner: When the applicant and his spouse live in the same household, the spouse’s income and resources always are considered in determining eligibility, “whether or not they are actually contributed.” 42 CFR § 435.723 (b) (1980). When the applicant and spouse cease to share the same household, the spouse’s income is disregarded the next month, § 435.723 (d), unless both are eligible for assistance. In the latter case, the income of both is considered for six months after their separation. § 435.723 (c).

Greater “deeming” is authorized in § 209 (b) States. The regulations require such States to “deem” income at least to the extent required in SSI States. § 435.734. And, if they choose, § 209 (b) States may “deem” to the full extent that they did before 1972. Ibid.7

II

Respondent, an organization dedicated to helping the Nation’s elderly,8 filed this suit in the District Court for the District of Columbia attacking some of the Secretary’s regulations applicable in § 209 (b) States.9 Respondent argued that “deeming” impermissibly employs an “arbitrary formula” to impute a spouse’s income to an institutionalized Medicaid applicant. According to respondent, “deeming” is inconsistent with § 1902 (a) (17) of the Act, 42 U. S. C. § 1396a (a) (17), which provides that only income “available” to the applicant may be considered in establishing entitlement to and the amount of Medicaid benefits.10 In respondent’s view, before a State may take into account the income of a spouse in calculating the benefits of any institutionalized applicant, the State must make a factual determination that the spouse’s income actually is contributed to that applicant.

The District Court agreed with respondent and declared the regulations invalid. Gray Panthers v. Secretary, Dept. of HEW, 461 F. Supp. 319 (1978).11 The Court of Appeals for the District of Columbia Circuit affirmed, but under a different theory. Gray Panthers v. Administrator, Health Care Financing Administration, 203 U. S. App. D. C. 146, 629 F. 2d 180 (1980). Citing this Court’s decision in Citizens to Preserve Overton Park v. Volpe, 401 U. S. 402 (1971), the court held that the regulations were invalid because the Secretary, in authorizing “deeming” of income between nonco-habiting spouses, had failed to “tak[e] . . . into account” two “relevant factors.” 203 U. S. App. D. C., at 149-150, 629 F. 2d, at 183-184. First, where spouses are separated they maintain two households rather than one. For those already put to this additional expense, it is unfair to continue to treat the couple as a “single economic unit” jointly responsible for the medical expenses of each. Id., at 151, 629 F. 2d, at 185. Second, the requirement of support carries with it the potential to interject “disruptive forces” into people’s lives. Id., at 152, 629 F. 2d, at 186. The noninstitutionalized spouse is

“faced with the 'choice’ of reducing his or her standard of living to a point apparently set near the poverty line, or being responsible for the eviction of his or her spouse from the institution.” Ibid.

One aspect of this “disruption,” according to the court, was the fact that the “deeming” requirement creates an incentive for couples to divorce. Id., at 152, n. 14, 629 F. 2d, at 186, n. 1414 .. Because the court believed that the Secretary had not adequately considered these effects of “deeming,” it affirmed the District Court’s order invalidating the regulations and remanded to the Secretary for reconsideration.12

We granted certiorari sub nom. Harris v. Gray Panthers, 449 U. S. 1123 (1981), to resolve disagreement among the Courts of Appeals over the validity of “deeming” income in determining Medicaid benefits.1313

III

Congress explicitly delegated to the Secretary broad authority to promulgate regulations defining eligibility requirements for Medicaid. We find that the regulations at issue in this case are consistent with the statutory scheme and also are reasonable exercises of the delegated power. The Court of Appeals therefore was not justified in invalidating them, and we reverse.

A

The Social Security Act is among the most intricate ever drafted by Congress. Its Byzantine construction, as Judge Friendly has observed, makes the Act “almost unintelligible to the uninitiated.” Friedman v. Berger, 547 F. 2d 724, 727, n. 7 (CA2 1976), cert, denied, 430 U. S. 984 (1977).14 Perhaps appreciating the complexity of what it had wrought, Congress conferred on the Secretary exceptionally broad authority to prescribe standards for applying certain sections of the Act. Batterton v. Francis, 432 U. S. 416, 425 (1977). Of special relevance in the present case is the delegation of authority in § 1902 (a) (17) (B) of the Act, 42 U. S. C. § 1396a (a)(17)(B), one of the provisions setting requirements for state Medicaid plans. Participating States must grant benefits to eligible persons “taking into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant” (emphasis added).

In view of this explicit delegation of substantive authority, the Secretary’s definition of the term “available” is “entitled to more than mere deference or weight,” Batterton v. Francis, 432 U. S., at 426. Rather, the Secretary’s definition is entitled to “legislative effect” because, “[i]n a situation of this kind, Congress entrusts to the Secretary, rather than to the courts, the primary responsibility for interpreting the statutory term.” Id., at 425. Although we do not abdicate review in these circumstances, our task is the limited one of ensuring that the Secretary did not “exeee[d] his statutory authority” and that the regulation is not arbitrary or capricious. Id., at 426.

B

We do not think that the regulations at issue, insofar as they authorize some “deeming” of income between spouses, exceed the authority conferred on the Secretary by Congress. Section 1902 (a)(17)(D) of the Act, 42 U. S. C. § 1396a (a) (17) (D), enacted in 1965, provides that, in calculating benefits, state Medicaid plans must not

“take into account the financial responsibility of any individual for any applicant or recipient of assistance under the plan unless such applicant or recipient is such individual’s spouse or such individual’s child who is under age 21 or [in certain circumstances] is blind or disabled . . .. .” (Emphasis added.)

It thus is apparent that, from the beginning of the Medicaid program, Congress authorized States to presume spousal support. Norman v. St. Clair, 610 F. 2d 1228, 1236 (CA5 1980), cert, pending sub nom. Schweiker v. Norman, No. 80-498.

The legislative history of this provision is fully consistent with its language. The Senate and House Reports accompanying the 1965 amendments used virtually identical language in endorsing the concept of “deeming” between spouses. The Senate Report states in pertinent part:

“The committee believes it is proper to expect spouses to support each other and parents to be held accountable for the support of their minor children .... Such requirements for support may reasonably include the payment by such relative, if able, for medical care. Beyond such degree of relationship, however, requirements imposed are often destructive and harmful to the relationships among members of the family group. Thus, States may not include in their plans provisions for requiring contributions from relatives other than a spouse or the parent of a minor child .. . . .” S. Rep. No. 404, 89th Cong., 1st Sess., 78 (1965) (emphasis added).

Accord, H. R. Rep. No. 213, 89th Cong., 1st Sess., 68 (1965). Senator Long, who headed the Senate’s conference delegation, summarized the effect of subsection (17) as follows:

“No income can be imputed to an individual unless actually available; and the financial responsibility of an individual for an applicant may be taken into account only if the applicant is the individual’s spouse . .. . .” Ill Cong. Rec. 18350 (1965).

This confirms our view that “Congress intended that income deemed from a spouse” could “be a part of the 'available’ income which the state may consider in determining eligibility.” Norman v. St. Clair, supra, at 1237.

If “deeming” were not permissible, subsection (17) (D) would be superfluous. Payments actually received by a Medicaid applicant — whether from a spouse or a more distant relative — are taken into account automatically. Thus, if there is to be content to subsection (17)(D)’s distinction between the responsibility of a spouse and that of a more distant relative, the subsection must envision that States can “deem” the income of the former but not the latter. See 610 F. 2d., at 1237.

Respondent is unable to offer a persuasive alternative explanation of subsection (17) (D). It suggests that Congress included the subsection simply to permit States to enforce their “relative responsibility laws” against a noncontributing spouse. In other words, respondent believes that Congress intended to prohibit States from automatically taking into account a spouse’s income in computing benefits, but simultaneously to authorize States to sue any spouse who failed to contribute income to a Medicaid applicant. We find this argument unpersuasive. It is not

“an answer to say that the state can take action against the spouse to recover that which the spouse was legally obligated to pay. [It is] unrealistic to think that the state will engage in a multiplicity of continuing individual lawsuits to recover the money that it should not have had to pay out in the first place. [Because States cannot practically do so, there would be] an open invitation for the spouse to decide that he or she does not wish to make the excess payment.” Brown v. Stanton, 617 F. 2d 1224, 1234 (CA7 1980) (Pell, J., dissenting in part and concurring in part), cert, pending, No. 79-1690.15

Nothing in the 1972 amendments suggests that Congress intended to terminate the practice of “deeming” already contained in many state plans; rather, Congress appears to have ratified this practice implicitly. As noted above, the 1972 SSI program consolidated and set national standards for three of the four categorical grant programs. Traditionally, all recipients of categorical aid were entitled to Medicaid. Congress, however, did not want to force additional Medicaid obligations on States. It therefore enacted § 209 (b) to ensure that States that do not wish to do so would not have to enlarge Medicaid eligibility to SSI levels. States using the § 209 (b) option thus were told they could retain virtually all16 of the Medicaid eligibility limitations — including “deeming” — that were allowed under the original Act.

C

Respondent nevertheless insists that the Secretary’s regulation is inconsistent with provisions of the statute and also contrary to statements in the legislative history. The Act requires Medicaid determinations to be made only on the basis of the income “available to the applicant.” 42 U. S. C. § 1396a (a)(17)(B) (emphasis added). According to respondent, the use of that term demonstrates that Medicaid entitlements must be determined on the basis of income “actually in the hands .... of the institutionalized spouse,” Tr. of Oral Arg. 30, not imputed on the basis of an “arbitrary formula.” Respondent acknowledges the duty of spousal support as a general matter, id., at 26-27, but argues that the Act nevertheless requires an individualized determination of availability in each case.

We take a different view. It is clear beyond doubt that Congress was wary of imputing the income of others to a Medicaid applicant.17 Yet, as we noted above, Congress treated spouses differently from most other relatives by explicitly authorizing state plans to “take into account the financial responsibility” of the spouse. 42 U. S. C. § 1396a (a) (17) (D). Congress thus demonstrated that “deeming” is not antithetical to the general statutory requirement that Medicaid eligibility be based solely on resources “available” to the applicant. “Available” resources are different from those in hand. We think that the requirement of availability refers to resources left to a couple after the spouse has deducted a sum on which to live. It does not, as respondent argues, permit the State only to consider the resources actually paid by the spouse to the applicant. See Herweg v. Ray, 619 F. 2d 1265, 1272 (CA8 1980) (en banc) (opinion of Ross, J.) (aff’g by an equally divided court 481 F. Supp. 914 (SD Iowa 1978)), cert, pending, No. 80-60.

Sound principles of administration confirm our view that Congress authorized “deeming” of income between spouses. The administration of public assistance based on the use of a formula is not inherently arbitrary. Cf. Weinberger v. Salfi, 422 U. S. 749, 781, 782, 784 (1975). There are limited resources to spend on welfare. To require individual determinations of need would mandate costly factfinding procedures that would dissipate resources that could have been spent on the needy. Id., at 784. Sometimes, of course, Congress has required individualized findings of fact.18 In this case, however, the Act and legislative history make clear that Congress approved some “deeming” of income between individuals and their spouses, at least where States had enacted rules to this effect before 1972.

IV

We are not without sympathy for those with minimal resources for medical care.19 But our “sympathy is an insufficient basis for approving a recovery” based on a theory inconsistent with law. Potomac Electric Power Co. v. Director, OWCP, 449 U. S. 268, 284 (1980).20 This suit is a direct attack on regulations authorizing the concept of “deeming” in the abstract. Hardships resulting from provisions in particular state plans that set aside inadequate sums for the contributing spouse, see n. 19, supra, are not at issue here.2121

We hold that the Secretary properly exercised the authority delegated by Congress in promulgating regulations permitting “deeming” of income between spouses in § 209 (b) States. Cf. Batterton v. Francis, 432 U. S. 416 (1977).22 Accordingly, we reverse the decision under review and remand for proceedings consistent with this opinion.23

It is so ordered.