DOMA Decision Will Have Widespread Impact on Federal Health Care Programs

The Supreme Court’s ruling in U.S. v Windsor, which invalidated the definition of marriage in the Defense of Marriage Act, requires the federal government to recognize same-sex marriages that are valid under state law. In the states where same-sex marriage is legal, married couples will be entitled to the financial benefits and burdens of marriage under federal law with respect to Medicare, Medicaid, and the health insurance affordability programs created by the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148). Married same-sex couples also will be subject to the restrictions on ownership and reporting obligations imposed on health care providers and their families.

Medicaid and the Insurance Exchanges

Eligibility for Medicaid, the insurance exchanges, and related assistance is based upon a combination of family status, income, and resources. A household comprising two adults who are not married is two separate eligibility units, while a married couple is only one. The federal poverty level (FPL) is $11,490 for a household of one, $15,510 for a married couple. If each spouse’s income is $10,000, both are eligible for Medicaid if the state expands eligibility under PPACA, and neither is eligible to buy insurance through the health insurance exchange. When they are treated as married, the couple’s combined income puts them at 129 percent of FPL. If their state expands Medicaid under PPACA, they are eligible. If it does not, the couple can buy coverage through the exchange, and they may be eligible for premium assistance.

If one spouse’s income is $10,000 and the other’s is $40,000, in a state that does not recognize their marriage, one is eligible for Medicaid if the state expands. The other could by insurance through the exchange. With an income just under 350 percent of FPL, that spouse may qualify for some assistance with premiums or cost sharing. If the state does not expand Medicaid eligibility, the spouse with the lower income has no options, and the higher-income spouse cannot cover him or her on the exchange policy.

Long-Term Care Assistance

When one spouse needs care in a nursing facility, if he or she applies for Medicaid, the agency will consider the income and resources of both spouses as available. The eligibility rules allow transfers between spouses to bring the community spouse up to a set level of income and resources. But if the couple is not considered married, a transfer from the institutionalized spouse to the community spouse would trigger a penalty and delay Medicaid eligibility. The law also provides for a lien against the home and recovery from the estate of an individual who has received Medicaid for long-term care. The lien and estate recovery requirements are not applied while a beneficiary’s spouse is living in the home. CMS guidance advised states that DOMA did not allow them to recognize the marriages of same-sex couples, but they had discretion to waive lien enforcement, estate recovery, or imposition of a penalty period that would cause undue hardship. The guidance encouraged states to set standards so that they would make consistent determinations regarding undue hardship.

Medicare

If one spouse does not have a sufficient work history to be automatically eligible for Medicare, recognition of the marriage would make him or her eligible based on the other spouse’s work history. If the marriage is not recognized, the same individual would have to pay premiums to be eligible for Medicare. The couple’s income also is relevant to the amount of premiums they would pay for coverage under Part B, Medicare Advantage, or the prescription drug benefit. To the extent that the combined deductible for a married couple is less than the deductible for two single individuals, recognition of their marriage may make a big difference to their available income.

HHS Response

HHS Secretary Kathleen Sebelius praised the ruling as a victory for equality. “The federal government is no longer forced to discriminate against legally married same sex couples,” she said. In addition, she pledged to work with the Justice Department to review the relevant rules and to “ensure that this decision is implemented swiftly and smoothly.” In addition to the eligibility issues discussed above, the Secretary will need to review laws and regulations that limit or require reporting of ownership interests in facilities by related parties and other provisions related to program integrity.

Draining the Pipeline of Pending Cases

On June 27, 2013, the Supreme Court denied petitions for certiorari requesting review of other appeals court decisions that held the Defense of Marriage Act invalid, including the First Circuit decision in Massachusetts v Department of HHS, the Ninth Circuit decision in Diaz v Brewer, and other cases that had been consolidated with them.