## Facts

- Robert Morenz lived in a Connecticut nursing home and was an “institutionalized spouse” under federal Medicaid spousal-impoverishment rules; his wife, Clara, remained at home as the “community spouse.”
- A Medicaid application was filed for Robert in January 2004; Clara, acting under power of attorney, completed the application.
- Robert executed an assignment transferring to Connecticut any rights he had to spousal support from Clara.
- Clara submitted a written refusal stating she would not contribute further to Robert’s financial support.
- The Connecticut Department of Social Services (DSS) found Robert’s own resources were within the Medicaid personal resource limit, but deemed Clara’s resources available to Robert for initial eligibility and treated her resources above the community spouse resource allowance (about $157,500) as disqualifying.
- DSS denied the application; the Morenzes sought declaratory and injunctive relief in federal court.
- The district court granted summary judgment for the Morenzes, and DSS appealed.

## Issues

1. Whether federal Medicaid law permits a state to deny initial Medicaid eligibility by deeming a community spouse’s excess resources available to an institutionalized spouse when the institutionalized spouse assigns spousal support rights to the state and the community spouse refuses support.
2. Whether the assignment of spousal support rights and the community spouse’s refusal trigger 42 U.S.C. § 1396r-5(c)(3) so that the state must pursue the community spouse directly rather than condition eligibility on the spouse’s resources.

## Decision

- The Second Circuit affirmed summary judgment for the Morenzes.
- When the institutionalized spouse assigns to the state any rights to support from the community spouse and the community spouse refuses to make support available, the state may not deny initial Medicaid eligibility based on the community spouse’s excess resources.
- The state’s remedy is to seek recovery from the refusing community spouse under applicable law, not to treat the spouse’s resources as available for the applicant’s initial eligibility.

## Legal Principles

- Under 42 U.S.C. § 1396r-5, the general rule of deeming a community spouse’s resources available for initial eligibility is subject to a statutory exception when support rights are assigned to the state and the community spouse refuses support.
- Section 1396r-5(c)(3) authorizes the state to proceed against the refusing community spouse for support or recovery of correctly paid assistance, while barring denial of initial eligibility on the ground that the community spouse will not contribute resources.
- Federal Medicaid requirements constrain state eligibility methodologies; a state practice that effectively nullifies § 1396r-5(c)(3) is not permitted.

## Conclusion

The Second Circuit held that, once an institutionalized spouse assigns spousal support rights to the state and the community spouse refuses to provide support, Medicaid eligibility cannot be denied by deeming the refusing spouse’s excess resources available; the state must instead pursue the community spouse directly for support or recovery.


Morenz v. Wilson-Coker, 415 F.3d 230 (2d Cir. 2005)