child in the MFBU, so that s/he may apply for Medi-Cal benefits, the child's assets will be deemed to other family members in the MFBU, contrary to the express language of § (17)(D).
We acknowledge that Vance struck a rule which mandated consideration of sibling income, whereas this particular result can be avoided in California by "voluntarily excluding" children from a MFBU, but the child must then forego any Medicaid assistance. This sort of conditional "voluntary exclusion provision" is just as inconsistent with the unqualified language of subsection (17)(D) as a mandatory rule. There is not the slightest hint that Congress' plainly expressed deeming limitations may be ignored because a child seeks Medicaid assistance.
Stated differently, there is not the slightest hint that Congress only intended subsection (17)(D) to apply if the family pays the price of excluding its children from eligibility for Medicaid. Simply put, section (17)(D) does not permit imposition of such a Hobson's choice.
California also points to a similar "voluntary stepfamily exclusion provision" as a means for avoiding stepparent deeming prohibited by subsection (17)(D). However, this exclusion provision is no more helpful to California than the "child exclusion provision" discussed above.
Normally, section 50373 requires that, in stepparent families, all of the couple's mutual and separate children be with them in the same MFBU, which results in improper deeming between stepparents and stepchildren. The "stepfamily exclusion provision" allows a stepfamily household to elect to receive Medi-Cal benefits only for the separate child(ren) of one parent. 22 C.C.R. § 50375. If this option is elected, only the separate children and the ineligible natural parent would be included in the MFBU, and thus only their income would be considered (consistent with § (17)(D)). Id.9 However, no other family members (besides the separate children of one parent) can then apply for Medi-Cal benefits. Id. Conversely, in order for other family members to receive medicaid assistance, all members must be included in the MFBU and thus subject their income and resources to deeming beyond that allowed by subsection (17)(D). Again, there is simply no basis for concluding that subsection (17)(D)'s deeming restrictions need only be observed where the stepfamily "voluntarily chooses" to limit medicaid assistance to the separate children of one parent.
In short, section 50373 does not mandate the deeming of sibling and stepparent income, given the "voluntary exclusion" options described above. It is no less invalid, however, than the mandatory rule struck in Vance because the only way to avoid improper sibling or stepparent deeming is to preclude children and/or other family members from applying for Medicaid. And if the above authorities make anything clear, it is that section 1396a(a)(17)(D) sets forth an absolute rule, the applicability of which does not hinge on precluding a child or any other member of the family from applying for Medicaid. Thus, the State's attempt, in effect, to restrict application of subsection (17)(D), through back door conditions nowhere contemplated by Congress, must be rejected. Indeed, we conclude that the "voluntary exclusion provisions," rather than demonstrating compliance with subsection (17)(D), only serve to highlight the State's disregard for a clear and unconditional federal law.
Moreover, even assuming a family chose to utilize one or both of the exclusions, California regulations would still result in improper deeming. For example, these exclusions would not affect that portion of section 50373 which provides for the deeming of income between unmarried persons who are cohabiting. And as noted above, under the stepfamily exclusion provision, some stepparent income may still be improperly deemed to stepchildren through the spouse.
Finally, we observe that the implicit premise underlying the State's position -- that as a matter of policy, total family resources should be considered when determining Medicaid eligibility, regardless of actual contribution -- has met with consistent rejection by the courts.
For example, in State of Georgia Dep't of Medical Assistance v. Bowen, 846 F.2d 708 (11th Cir. 1988) the Eleventh Circuit Court of Appeals rejected the argument that, by expanding deeming rules for the Aid to Families with Dependent Children program [AFDC], Congress intended to graft a "nuclear family responsibility" requirement into the Medicaid Act despite the plain meaning of section 1396a(a)(17)(D):
We are simply unwilling to presuppose that when Congress changes AFDC eligibility standards, it intends also to change Medicaid eligibility standards. Indeed, that it is logical to differentiate between AFDC eligibility and Medicaid eligibility is reflected by the nature of the benefits. The kind of benefits for which AFDC provides, housing and food, are shared by family members, so it could be argued that all of the financial resources of the family should be pooled in determining whether AFDC assistance is required. Medicaid benefits, however, are not shared in this manner, but rather pay for individual health care only, and do not become a part of a common resource. Thus, while the policy that all family members should contribute to the family's communal expenses may be persuasive in the AFDC context, it has no applicability in the Medicaid context where the assistance is not used for a communal expense.
846 F.2d at 712; See also, Malloy, 860 F.2d at 1184 (same reasoning); Vance, 793 F.2d at 1024 (rejecting application of nuclear family concept to Medicaid program); Ward v. Wallace, 652 F.Supp. 301, 305-06 (M.D.Ala. 1987), amended, 658 F. Supp. 441 (same). Thus, section 50373 can not be defended on the ground that Congress actually intended to impose responsibility for medical care on all family members.
In light of all the foregoing, it is HEREBY ORDERED as follows:
1. Plaintiffs' motion for a partial summary judgment that 22 C.C.R. § 50373 violates 42 U.S.C. § 1396a(a)(17)(D) is GRANTED.
2. Defendants Department of Health Services (hereinafter "DHS") and Kenneth Kizer are HEREBY ENJOINED from enforcing any rule or policy that results in consideration, in the absence of an actual contribution, of the income or resources of any individual other than a parent of a child who is under twenty-one, blind or disabled, or a spouse for purposes of determining eligibility or the amount of the share of cost of any other individual who is applying for or receiving Medi-Cal benefits.
3. Within 30 days of the date of this order, defendants DHS and Kizer shall confer with plaintiffs' counsel and attempt to reach agreement with respect to instructions for implementing this order. In the event that agreement is reached, the instructions shall be filed with this Court and transmitted to California county welfare departments no later than 45 calendar days from the date of this order. If no agreement is reached, plaintiffs and defendants DHS and Kizer shall each file proposed instructions together with a supporting memorandum on or before 45 calendar days from the date of this order. Opposing memorandum shall be filed within 10 calendar days of service of the proposed instructions. The matter will then be deemed submitted on the papers unless the Court orders otherwise.
4. Within five working days from the date of this order, defendants DHS and Kizer shall instruct California county welfare departments to identify the members of the class, as certified by this Court's order of December 5, 1989. Defendants DHS and Kizer shall instruct such welfare departments to complete identification of the aforesaid persons within 60 days from the date of this order. Prior to sending such instructions, defendants DHS and Kizer shall provide plaintiffs' counsel with a reasonable opportunity to comment on them. In the event that plaintiffs conclude that the instructions are deficient, they may seek further relief from this Court.
IT IS SO ORDERED.
Dated January 5, 1990