Illinois Appellate court preemption decision

The state intermediate appellate court in Illinois reached the merits of whether the federal Medicaid statute preempts state law regarding seeking spousal support from a community spouse’s income after the institutionalized spouse has been declared eligible for Medicaid. The court reversed the trial court on the merits and held that the state law was not preempted by federal law. Poindexter v. State ex rel. Dept. of Human Services, 2006 WL 3628956 (Ill.App. 4 Dist., Dec. 12, 2006).

The state intermediate appellate court in Illinois reached the merits of whether the federal Medicaid statute preempts state law regarding seeking spousal support from a community spouse’s income after the institutionalized spouse has been declared eligible for Medicaid.  The court reversed the trial court on the merits and held that the state law was not preempted by federal law.  Poindexter v. State ex rel. Dept. of Human Services, 2006 WL 3628956 (Ill.App. 4 Dist., Dec. 12, 2006). 

 

Preliminarily, the court rejected the state’s argument that the case should be dismissed for failure to exhaust administrative remedies.  The court held that the issue “is purely one of law,” and therefore “this is not an issue that falls within the particular expertise of an administrative agency.”  The state also argued that plaintiffs forfeited their claims by not raising them before the administrative agency.  The court rejected this contention.  The court stated that “plaintiffs’ argument insists that the law itself is unconstitutional based on federal preemption.”  That question is “outside the purview of the administrative agency,” and therefore was not forfeited.

 

The court then turned to the merits of the preemption issue.  The court stated that the federal Medicaid statute, specifically in this case, the Medicare Catastrophic Coverage Act of 1988 (MCCA), 42 U.S.C. § 1396r-5, would preempt state law “if it is impossible to comply with both federal and state law or where the state law stands as an obstacle to accomplishment and execution of the full purpose and intent of Congress.”  Plaintiffs relied on the provision of MCCA which states that “no income of the community spouse shall be deemed available to the institutionalized community spouse.”  42 U.S.C. § 1396r-5(b)(1).  However, the court ruled: “in light of the overarching goals of Medicaid and existing precedent at the time the MCCA was enacted, it becomes apparent that the seemingly definite language, ‘no income of the community spouse,’ was not meant as a barrier to spousal support.”  The court found support for its holding in US Supreme Court precedent, including Wisconsin Dept. of Health & Family Services v. Blumer, 534 U.S. 473 (2002), as well as cases from New York and Connecticut. 

 

One judge dissented on the merits, stating that the clear language of “MCCA restricts the State from seeking support from the income of a community spouse, even if his or her income is more than the monthly needs allowance, for his or her ‘institutionalized spouse’ receiving Medicaid.”