Poindexter v. State of Illinois

Docket No. 104853.

IN THE

SUPREME COURT

OF

THE STATE OF ILLINOIS

ROBERT N. POINDEXTER et al., Appellants, v. THE STATE OF

ILLINOIS, Acting Through the Department of Human Services, et

al., Appellees.

Opinion filed April 3, 2008.

JUSTICE FITZGERALD delivered the judgment of the court,

with opinion.

Chief Justice Thomas and Justices Freeman, Kilbride, Garman,

Karmeier, and Burke concurred in the judgment and opinion.

OPINION

This appeal arises out of the state’s administrative efforts to

recover from plaintiffs costs of their respective spouses’ nursing

home care. Rather than exhausting administrative remedies, plaintiffs

filed a suit for declaratory and injunctive relief in the circuit court of

Sangamon County. They asserted that the state spousal support

provisions (305 ILCS 5/10–1 through 10–28 (West 2006); 89 Ill.

Adm. Code §103.10 et seq.) were preempted by the Medicare

Catastrophic Coverage Act of 1988 (MCCA) (42 U.S.C. §1396r–5

(2000)). The circuit court found in favor of plaintiffs and enjoined the

state from seeking spousal support. The appellate court reversed over

a dissent. 372 Ill. App. 3d 1021. We granted plaintiffs leave to appeal

(210 Ill. 2d R. 315(a)) and affirm the appellate court.

BACKGROUND

We first discuss the federal provision at issue, then the state

provision that is allegedly in conflict with it, and then the specific

procedural facts of this case.

A. Medicare Catastrophic Coverage Act

Medicaid is a cooperative federal-state program authorized under

Title XIX of the Social Security Amendments of 1965 (42 U.S.C.

§1396 et seq.). It provides medical services to both the categorically

needy and the medically needy. Hines v. Department of Public Aid,

221 Ill. 2d 222, 227 (2006). Under prior law, a couple needed to

deplete nearly all of their assets before either one could satisfy

Medicaid eligibility requirements, leaving the spouse who remained

in the community in a financially precarious position. H.R. Rep. No.

100–105, at 69 (1988), reprinted in 1988 U.S.C.C.A.N. 857, 892. In

1988, Congress attempted to fix the Medicaid system to prevent

“spousal impoverishment.” 42 U.S.C. §1396r–5 (2000); Hines, 221

Ill. 2d at 228. The MCCA provided a formula for allowing the

institutionalization of one spouse, while keeping the spouse

remaining in the community some distance from the poverty line.

H.R. Rep. No. 100–105, at 69 (1988), reprinted in 1988

U.S.C.C.A.N. 857, 892.

Another goal of the MCCA was “preventing financially secure

couples from obtaining Medicaid assistance.” Wisconsin Department

of Health & Family Services v. Blumer, 534 U.S. 473, 480, 151 L. Ed.

2d 935, 944, 122 S. Ct. 962, 967 (2002), citing H.R. Rep. No.

100–105, at 65 (1988), reprinted in 1988 U.S.C.C.A.N. 857, 888. The

MCCA prevented an “institutionalized spouse” from qualifying for

Medicaid by transferring his or her interest in assets to the

“community spouse.” See H.R. Rep. No. 100–105, at 73-74 (1988),

reprinted in 1988 U.S.C.C.A.N. 857, 896-97; Johnson v. Guhl, 91 F.

Supp. 2d 754, 761 (D. N.J. 2000) (with the MCCA, “Congress

intended to close the loophole where a couple could shelter resources

in the community spouse’s name while the institutionalized spouse

-2-

received Medicaid”). Therefore, the MCCA tried to balance two

goals: “preventing impoverishment of the community spouse and

ensuring that no one avoided contributing his or her fair amount to

medical care.” Thomas v. Commissioner of the Division of Medical

Assistance, 425 Mass. 738, 740, 682 N.E.2d 874, 876 (1997).

To determine eligibility under these provisions, the state agency

takes a “snapshot” of the couple’s total current and forecasted

resources and income as of the beginning of the first continuous

period of institutionalization. See H.R. Rep. No. 100–105, at 73-74

(1988), reprinted in 1988 U.S.C.C.A.N. 857, 896-97; Mistrick v.

Division of Medical Assistance & Health Services, 154 N.J. 158, 171,

712 A.2d 188, 195 (1998); 42 U.S.C. §1396r–5(c)(1)(A) (2000).

Based on this snapshot, the agency attributes the couple’s resources

and income into spousal shares by a process of “deeming” and

“diversion.” See M. Farley, When “I Do” Becomes “I Don’t”:

Eliminating The Divorce Loophole to Medicaid Eligibility, 9 Elder

L.J. 27 (2001) (noting that the key provisions of the MCCA are the

“deeming” and “diversion” provisions).

The MCCA’s provisions consider both income and resources in

determining an applicant’s eligibility. Blumer, 534 U.S. at 481, 151

L. Ed. 2d at 944, 122 S. Ct. at 967. Under the income category, the

institutionalized spouse’s income cannot exceed the maximum level

set by the state. However, the community spouse’s income may not

be “deemed available” to the institutionalized spouse in determining

eligibility. 42 U.S.C. §1396r–5(b)(1) (2000). This is often called the

“name-on-the-check” rule. Blumer, 534 U.S. at 481, 151 L. Ed. 2d at

944, 122 S. Ct. at 967. Under this rule, a community husband’s

income that he retains for himself will not, under state law, be

counted against (or “deemed available” to) his institutionalized

spouse at the eligibility phase of the Medicaid process. Cf. Schweiker

v. Gray Panthers, 453 U.S. 34, 44, 69 L. Ed. 2d 460, 470, 101 S. Ct.

2633, 2640 (1981).

Next, the eligibility rules look at a couple’s total resources. The

state agency evaluates a couple’s assets collectively, regardless of

ownership. This collective evaluation of the couple’s assets closed the

loophole that allowed the couple to shelter resources solely in the

name of the community spouse. A couple’s total resources must be

below a certain statutorily prescribed level called the “Community

-3-

Spouse Resource Allowance” (CSRA) before the institutionalized

spouse will be eligible. If the total resources are above this limit, the

couple must “spend down” to gain eligibility. Houghton v.

Reinertson, 382 F.3d 1162, 1165 (10th Cir. 2004); 42 U.S.C.

§1396r–5(c)(2) (2000).1

The CSRA also diverts some of the institutionalized spouse’s

resources where the community spouse has little of his or her own

resources. This may occur in the common case of a spouse who spent

his or her entire career working in the home. To avoid having to

“spend down” the entirety of a couple’s assets to qualify the

institutionalized spouse for Medicaid and thus impoverish himself or

herself in the process, the community spouse is allowed to keep the

CSRA. 42 U.S.C. §1396r–5(f)(2) (2000). In other words, the state

agency diverts some of the instititionalized spouse’s assets to the

community spouse to prevent spousal impoverishment. Conversely,

if the community spouse retains most of the wealth, then his or her

assets must be “spent down” only to the point of the CSRA.

The MCCA also provides diversion procedures regarding the

couple’s income to prevent spousal impoverishment. Once eligibility

is reached, the state agency reexamines the ailing spouse’s income to

determine how much must be contributed toward nursing home costs

and whether any of it should be left available to the community

spouse. The institutionalized spouse is permitted to divert a portion

of monthly income to the community spouse. This deduction from the

institutionalized spouse’s monthly income is known as the

“community spouse monthly income allowance” (CSMIA). 42 U.S.C.

§1396r–5(d)(1)(B) (2000). If the community spouse’s income falls

below the “minimum monthly maintenance needs allowance”

1

All nonexcludable resources of both spouses over and above the CSRA

are to be available to pay for nursing care costs of the institutionalized

spouse. See 42 U.S.C. §§1396r–5(c)(1)(A), (c)(2) (2000). The remaining

resources in excess of the community resource allowance are considered

available to the institutionalized spouse, who will be eligible for Medicaid

only if those remaining resources are less than or equal to $2,250. 20 C.F.R.

§416.1205 (2001). Any and all resources above the CSRA must then be

spent before an institutionalized spouse will be eligible for medicaid.

-4-

(MMMNA), the agency allocates a portion of the institutionalized

spouse’s income to the community spouse. 42 U.S.C. §1396r–5(d)(3)

(2000).2 Thus, if the name-on-the-check rule does not provide the

community spouse with this measure of sufficient income, the agency

must look to the institutionalized spouse’s income to bring the

community spouse’s income up to the MMMNA. 42 U.S.C.

§1396r–5(d)(6) (added by Pub. L. No. 109–71, eff. February 8, 2006).

Finally, the MCCA provides a “fair hearing” procedure through

which a couple may challenge the results of the state agency’s

“snapshot.” At the fair hearing, also known as an “(e)(2)(C) hearing,”

the state agency can address any dissatisfaction with the CSRA and

the MMMNA. 42 U.S.C. §1396r–5(e)(2)(C) (2000). For example,

“[i]f the couple succeeds in obtaining a higher CSRA, the

institutionalized spouse may reserve additional resources for

posteligibility transfer to the community spouse. The enhanced CSRA

will reduce the resources the statute deems available for the payment

of medical expenses; accordingly, the institutionalized spouse will

become eligible for Medicaid sooner.” Blumer, 534 U.S. at 483-84,

151 L. Ed. 2d at 946, 122 S. Ct. at 969.

B. Spousal-Support Provisions

After the institutionalized spouse has received benefits, a state

agency may seek recovery of nursing home costs from the community

spouse. Other states refer to this as a “pay and chase” system. Cf. 372

Ill. App. 2d at 1034 (referring to Connecticut’s system, whereby it

cannot refuse Medicaid eligibility based on a couple’s resources, but

then must seek contribution from the community spouse). The State

of Illinois’ spousal support provisions are found in article X of the

Illinois Public Aid Code (305 ILCS 5/10–1 through 10–28 (West

2

The MMMNA is calculated by multiplying the federal poverty level for

a couple by a percentage set by the states. Since 1992, that percentage must

be at least 150% (42 U.S.C. §§1396r–5(d)(3)(A), (d)(3)(B) (2000)), but the

resulting MMMNA may not exceed $1,500 per month in 1988 dollars. 42

U.S.C. §§1396r–5(d)(3)(C), (g) (2000). At the time of litigation in this case,

the Illinois MMMNA, called in Illinois the “Community Spouse

Maintenance Needs Standard,” was $2,378.

-5-

2006)). When one spouse receives Public Aid, the other spouse is

liable to the agency providing the benefits. 305 ILCS 5/10–2 (West

2006). Section 10–11 of the Code provides that if the appropriate

state agency determines that a spouse owes support, the collections

unit of that agency may issue an administrative order reflecting the

amount owed to the state as reimbursement. 305 ILCS 5/10–11 (West

2006).

The regulations promulgated by the state provide that the Illinois

Department of Human Services “shall seek to obtain support for

recipients from legally responsible individuals and shall seek the

enforcement of support obligations.” 89 Ill. Adm. Code §103.10.

However, “the Department shall not seek to obtain support for

residents of long term care facilities if income of the spouse in the

community is less than or equal to the” MMMNA. 89 Ill. Adm. Code

§103.10. In other words, the state may only recover from a

community spouse whatever monies that spouse may have in addition

to the MMMNA. Above that limit, 1% per month of the community

spouse’s gross annual income earned above $7,000 will be assessed

as responsible-relative liability. 89 Ill. Adm. Code §103.20(a)(2);

§103, Table A. The responsible family member must submit a copy

of his or her most recent federal income tax return for this

determination; otherwise that person is held liable for the full amount

of the assistance provided. 89 Ill. Adm. Code §103.20.

An administrative support order becomes “final” if the person

receiving the order fails to timely seek an administrative hearing. 305

ILCS 5/10–12, 10–13 (West 2006). Review of administrative findings

may be made pursuant to section 10–11 of the Public Aid Code (305

ILCS 5/10–11 (West 2006)), and final agency determinations can be

challenged under the Administrative Review Law (735 ILCS 5/3–102

(West 2006)).

C. Procedural History

The State of Illinois, acting through the Illinois Department of

Public Aid (Public Aid) and the Illinois Department of Human

Services (Human Services), administratively adjudged and sought

spousal support from certain plaintiffs for their institutionalized

spouses. Rather than proceeding with further administrative options,

-6-

on July 22, 2004, plaintiffs Robert Poindexter, Mirl Whitaker,

Maurice Hardy, Virginia McCulley, and Roger Meredith filed a

complaint, in the circuit court of Sangamon County, for declaratory

and injunctive relief against the state, Public Aid, Human Services,

and the directors of the relevant state agencies (hereinafter,

defendants).

Plaintiffs alleged that each plaintiff was the “community spouse”

of an “institutionalized spouse” receiving medical assistance under

the Medicaid program administered by the State of Illinois. Plaintiffs

claimed that article X and its implementing regulations conflicted

with the MCCA, and thus were preempted pursuant to the supremacy

clause of the United States Constitution (U.S. Const., art. VI, cl. 2).

The MCCA, according to plaintiffs, prohibited the collection of

income from the community spouse after the eligibility determination.

They principally cited section 1396r–5(b)(1), which provides as

follows: “During any month in which an institutionalized spouse is

in the institution, except as provided in paragraph (2), no income of

the community spouse shall be deemed available to the

institutionalized spouse.” 42 U.S.C. §1396r–5(b)(1) (2000).

According to plaintiffs, this section prohibits the state from seeking

a contribution for the nursing home costs from the community spouse

as long as the institutionalized spouse remained in the institution.

Therefore, plaintiffs sought a declaration that Illinois’ spousal support

provisions, article X and its companion regulations, conflict with the

MCCA and thus are preempted under the supremacy clause (U.S.

Const., art. VI, cl. 2). Plaintiffs sought to permanently enjoin the

defendants from undertaking any further collection efforts. They

additionally asked for an order accounting for all the monies

defendants had received from plaintiffs and requiring defendants to

refund those sums, and to pay their litigation costs, expenses, and

reasonable attorney fees.

Defendants filed a motion to dismiss under section 2–619(1) of

the Code of Civil Procedure (735 ILCS 5/2–619(1) (West 2006))

based on plaintiffs’ alleged failure to exhaust their administrative

remedies as provided by the Public Aid Code and the Administrative

Review Law. According to documents submitted by defendants to the

trial court, plaintiff Poindexter had been issued an administrative

order requiring him to pay $19,902 to reimburse Human Services for

-7-

payments made on behalf of his wife. Human Services also issued

Poindexter an ongoing assessment for her continued care of $1,210

a month. Poindexter did not seek a hearing from Human Services

within the time provided by the Code. He also did not seek review of

a subsequent order denying him a hearing because the request for a

hearing he eventually made was untimely. Defendants also contended

that plaintiffs Meredith and Hardy were subject to administrative

support orders, but they also failed to seek administrative hearings

with Human Services to contest the orders. Defendants’ documents

further showed that plaintiff Whitaker refused to answer a subpoena

directed to him by Human Services requesting information regarding

his income. Plaintiff McCulley also failed to provide Human Services

with requested information, although a Human Services local office

had information that her income from an annuity, beginning in

November 2003, exceeded $8,300 per month. The trial court denied

the defendants’ motion to dismiss.3

The original plaintiffs filed a motion entitled “Argument,” which

the trial court treated as a motion for summary judgment. In ruling in

favor of plaintiffs, the trial court noted the MCCA makes it clear that

income is attributable to the spouse to whom it is paid, i.e., the

“name-on-the-check” rule. Among other findings, the trial court

stated:

“[T]he MCCA does not distinguish between eligibility and

post-eligibility support, it rather plainly states: ‘During any

month in which an institutionalized spouse is in the

institution; except as provided in paragraph (2), no income of

the community spouse shall be deemed available to the

institutionalized spouse.’ The MCCA expressly states that ‘no

income’ of a community spouse may be deemed available to

3

The trial court later allowed motions to join by Orville Davis,

Catherine Josephson, Margaret Gonet, and Mary Lou Dickens. They all

alleged that they were community spouses of institutionalized spouses, that

the issues were the same as those of the other plaintiffs, and that granting

the motion would be in the interests of judicial economy. The record does

not reveal that defendants filed a specific motion to dismiss as to these

plaintiffs.

-8-

an institutionalized spouse in ‘any month,’ during which the

institutionalized spouse receives medical assistance.”

(Emphases in original.)

The trial court enjoined defendants from seeking any support from

community spouses for any month in which the institutionalized

spouse is receiving Medicaid. It also ordered that the plaintiffs

recover costs and expenses.

Defendants appealed, and the appellate court reversed. The

appellate court first rejected the defendants’ argument that plaintiffs

failed to exhaust administrative remedies. The appellate court found

that the issue raised was purely one of law and “is not an issue that

falls within the particular expertise of an administrative agency,

especially considering it involves the interpretation of a federal

statute.” 372 Ill. App. 3d at 1025. The court noted that unlike the

situation presented in Arvia v. Madigan, 209 Ill. 2d 520 (2004), none

of plaintiffs’ claims are specifically required by statute to be brought

before an administrative law judge. Further, following Arvia,

plaintiffs’ claims are purely constitutional and there are no factual

disputes. 372 Ill. App. 3d at 1025-26.

Next, the appellate court addressed the preemption issue. The

court examined the language of the MCCA and stated:

“The introductory language of the MCCA clearly states

that the provisions of the MCCA are for the purposes of

determining Medicaid eligibility, which would not include

issues involving ongoing spousal support. To read the

subsection that states ‘no income of the community spouse’

that plaintiffs rely on as extending beyond the scope of an

eligibility determination would essentially render the

introductory language meaningless.” 372 Ill. App. 3d at 1029.

The court also noted that the word “deem” is a term of art in the

Medicaid context, used for purposes of determining eligibility. 372

Ill. App. 3d at 1029. Assets owned by each spouse are added together,

and each spouse is “deemed” to own half, irrespective of any state’s

laws concerning community property. 372 Ill. App. 3d at 1029-30,

citing Schweiker, 453 U.S. at 44-45, 69 L. Ed. 2d at 470, 101 S. Ct.

at 2640-41. Since the MCCA clearly indicates that it is intended to

apply to determinations of eligibility, the clause plaintiffs rely on, “no

-9-

income of the community,” is clearly only in relation to

determinations of eligibility. 372 Ill. App. 3d at 1029. Justice Knecht

dissented, stating, in part: “I agree with the trial court: the 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.” 372 Ill. App. 3d at 1036 (Knecht, J., dissenting).

We granted leave to appeal (210 Ill. 2d R. 315(a)).

ANALYSIS

We address two issues: whether plaintiffs were required to

exhaust administrative remedies before they sought declaratory and

injunctive relief in circuit court; and whether the MCCA preempts

state spousal support provisions.

I

We first address defendants’ contention that plaintiffs’ complaint

for declaratory relief pursuant to the Illinois declaratory judgment

statute (735 ILCS 5/2–701(a) (West 2006)) should be dismissed due

to failure to exhaust administrative remedies.4 Section 2–619 permits

a dismissal after the trial court considers issues of law or easily

4

Plaintiffs initially challenge this argument by claiming that defendants

were required to raise it in a cross-appeal. We disagree. Rule 318(a) (155

Ill. 2d R. 318(a)) provides that in all appeals “any appellee, respondent, or

coparty may seek and obtain any relief warranted by the record on appeal

without having filed a separate petition for leave to appeal or notice of

cross-appeal or separate appeal.” This court has invoked Rule 318(a) in

finding that allowance of one party’s petition for leave to appeal brings

before this court the other party’s requests for cross-relief. See Heastie v.

Roberts, 226 Ill. 2d 515, 546 (2007); Tri-G, Inc. v. Burke, Bosselman &

Weaver, 222 Ill. 2d 218, 242 (2006); Weatherman v. Gary-Wheaton Bank

of Fox Valley, N.A., 186 Ill. 2d 472, 490 (1999). We do note, however, that

plaintiffs correctly point out that the cover of defendants’ brief did not

request cross-relief. Rule 315(h) provides: “If the brief of the appellee

contains arguments in support of cross-relief, the cover of the brief shall be

captioned: ‘Brief of Appellee. Cross-Relief Requested.’ ” 210 Ill. 2d R.

315(h).

-10-

proved issues of fact. 735 ILCS 5/2–619 (West 2006); Czarobski v.

Lata, 227 Ill. 2d 364 (2008). The question on appeal is “whether the

existence of a genuine issue of material fact should have precluded

the dismissal or, absent such an issue of fact, whether dismissal is

proper as a matter of law.” Kedzie & 103rd Currency Exchange, Inc.

v. Hodge, 156 Ill. 2d 112, 116-17 (1993). Our review proceeds de

novo. Czarobski v. Lata, 227 Ill. 2d at 369.

Defendants first argue that plaintiffs Poindexter, Meredith, and

Hardy failed to exhaust administrative remedies, including failing to

raise their constitutional claim at the administrative level. Defendants

cite two statutes as affirmative matter to defeat the plaintiffs’

complaint: (1) before filing suit, plaintiffs failed to exhaust their

administrative remedies, as required by section 10–11 of the Public

Aid Code (305 ILCS 5/10–11 (West 2006)); and (2) plaintiffs were

required to file an administrative review complaint under the

Administrative Review Law (735 ILCS 5/3–102 (West 2006)).

Plaintiffs respond that this is a facial challenge to the statute, falling

within a recognized exception to the exhaustion doctrine.

Courts apply the exhaustion doctrine to declaratory judgment

actions. Beahringer v. Page, 204 Ill. 2d 363, 374 (2003). Generally,

a party aggrieved by an administrative action must first pursue all

available administrative remedies before resorting to the courts.

Canel v. Topinka, 212 Ill. 2d 311, 320 (2004). The purpose of the

exhaustion doctrine is to allow administrative bodies to develop a

factual record and to permit them to apply the special expertise they

possess. Canel, 212 Ill. 2d at 320-21. Exhaustion also minimizes

interruption of the administrative process. Moreover, the aggrieved

party might succeed before the administrative body, obviating the

need for judicial involvement, thereby conserving judicial resources.

Canel, 212 Ill. 2d at 320-21. If a challenging party alleges that a

facially valid statute has been applied in an arbitrary or discriminatory

manner, “ ‘the rule generally prevails that recourse must be had in the

first instance to the appropriate administrative board.’ ” Beahringer,

204 Ill. 2d at 374, quoting Bank of Lyons v. County of Cook, 13 Ill. 2d

493, 495 (1958). The exhaustion doctrine also precludes review

where the Administrative Review Law provides a remedy. Canel, 212

Ill. 2d at 321.

-11-

A party who challenges the validity of a statute on its face,

however, is not required to exhaust administrative remedies. Arvia,

209 Ill. 2d at 532. “The reason for this exception is apparent:

administrative review is confined to the proofs offered and the record

created before the agency.” Arvia, 209 Ill. 2d at 532-33. “A facial

attack to the constitutionality of a statute, which presents purely legal

questions, is not dependent for its assertion or its resolution on the

administrative record.” Arvia, 209 Ill. 2d at 533; see also Canel, 212

Ill. 2d at 321 (“An aggrieved party may seek judicial review of an

administrative decision without complying with the exhaustion of

remedies doctrine where a statute *** is attacked as unconstitutional

on its face”); Landfill, Inc. v. Pollution Control Board, 74 Ill. 2d 541,

550 (1978) (“Exhaustion is not required where a statute or rule under

which an administrative body purports to act is challenged as

unauthorized, since the judicial determination will affect the

jurisdiction of the administrative body in all matters, not only in the

instant circumstances”). Further, there is virtually no chance the

aggrieved party will succeed before an agency where the issue is the

agency’s own assertion of authority. Landfill, 74 Ill. 2d at 550-51.

Here, we are asked to decide whether the MCCA preempts the

spousal support law: a direct challenge to the authority of the

defendants to act in this manner. There has been no allegation that the

defendants misapplied the statute or regulation at issue or applied it

in an arbitrary manner. The complaint alleges Illinois’ provisions

conflict with federal law in violation of the United States

Constitution. Therefore, this matter falls squarely within an exception

to the exhaustion requirement, and defendants’ argument on this point

is rejected.

We next reject defendants’ argument that six of the other

plaintiffs, Whitaker, McCulley, Davis, Josephson, Gonet, and

Dickens, should have been dismissed because they had not yet

received final administrative orders, citing National Marine, Inc. v.

Illinois Environmental Protection Agency, 159 Ill. 2d 381 (1994). We

first note that defendants never filed a motion to dismiss as to

plaintiffs Whitaker, Davis, Josephson, Gonet, or Dickens.

Nevertheless, even if defendants’ motions as to those plaintiffs were

not forfeited, we would reject it. In National Marine, we noted that

in cases involving challenges to administrative actions, application of

-12-

the ripeness doctrine prevents courts “ ‘ “from entangling themselves

in abstract disagreements over administrative policies” ’ ” and

“ ‘ “protect[s] the agencies from judicial interference until an

administrative decision has been formalized and its effects felt in a

concrete way by the challenging parties.” ’ ” National Marine, 159 Ill.

2d at 388, quoting Bio-Medical Laboratories, Inc. v. Trainor, 68 Ill.

2d 540, 546 (1977), quoting Abbott Laboratories v. Gardner, 387

U.S. 136, 148-49, 18 L. Ed. 2d 681, 691, 87 S. Ct. 1507, 1515 (1967).

There, the Illinois Environmental Protection Agency had issued a

notice informing the plaintiff that it could be potentially liable for a

“ ‘release or a substantial threat of a release of a hazardous

substance’ ” on the property pursuant to section 4(q) of the Act.

National Marine, 159 Ill. 2d at 383, quoting Ill. Rev. Stat. 1991, ch.

111½, par. 1004(q). This court noted that the “complaint, in essence,

sought to obtain judicial review of the Agency’s issuance of the 4(q)

notice prior to the Agency’s initiation of cost-recovery/enforcement

proceedings before the Pollution Control Board (Board) or the circuit

court.” National Marine, 159 Ill. 2d at 385. We found, “at this

preliminary stage in the administrative process, it is not clear whether

the Agency will even initiate a cost-recovery/enforcement proceeding

against plaintiff before one of these bodies. Clearly, under the

circumstances, plaintiff’s complaint is premature.” National Marine,

159 Ill. 2d at 390-91.

None of those considerations are present in this case. Both parties

admit that there are no issues of fact and that an interpretation of the

MCCA in light of the spousal support laws is all that is required. The

monetary amounts have been determined and are not challenged by

the community spouses. Unlike National Marine, in this case there

are no abstract issues that this court faces. We therefore reject

defendants’ exhaustion argument and turn to consideration of whether

article X is preempted by the MCCA.

II

As to the preemption issue, plaintiffs submitted to the trial court

a brief entitled “Argument,” which the defendants, the trial court and

the appellate court treated as a motion for summary judgment.

Because both parties agree that this case requires only an

interpretation of the MCCA in light of Illinois’ spousal support

-13-

provisions, and admit that there are no issues of fact, we will do the

same. Summary judgment is appropriate where the pleadings show

that there is no genuine issue as to any material fact. 735 ILCS

5/2–1005(c) (West 2006). All cases involving summary judgment are

reviewed de novo. Sun Life Assurance Co. of Canada v. Manna, 227

Ill. 2d 128 (2007); see also Kinkel v. Cingular Wireless, LLC, 223 Ill.

2d 1, 15 (2006) (“[w]hether state law is preempted by a federal statute

is a question of law, subject to de novo review”).

The supremacy clause of the United States Constitution provides

that “[t]his Constitution, and the Laws of the United States *** shall

be the supreme Law of the Land *** any Thing in the Constitution or

Laws of any State to the Contrary notwithstanding.” U.S. Const., art.

VI, cl. 2. “State law is preempted under the supremacy clause in three

circumstances: (1) when the express language of a federal statute

indicates an intent to preempt state law; (2) when the scope of a

federal regulation is so pervasive that it implies an intent to occupy

a field exclusively; and (3) when state law actually conflicts with

federal law.” Village of Mundelein v. Wisconsin Central R.R., 227 Ill.

2d 281, 288 (2008), citing English v. General Electric Co., 496 U.S.

72, 78-79, 110 L. Ed. 2d 65, 74, 110 S. Ct. 2270, 2275 (1990). The

determination of whether state law is preempted turns on the intent of

Congress. Village of Mundelein, 227 Ill. 2d at 288, citing Wisconsin

Public Intervenor v. Mortier, 501 U.S. 597, 604, 115 L. Ed. 2d 532,

542, 111 S. Ct. 2476, 2481 (1991).

Here, although plaintiffs apparently contend that all three

circumstances are present in this case, their arguments as to the first

two circumstances amount to little more than one-sentence

conclusions. See In re Marriage of Bates, 212 Ill. 2d 489, 517 (2004)

(“A reviewing court is entitled to have issues clearly defined with

relevant authority cited”). Rather, plaintiffs’ argument centers on the

third circumstance of preemption, whether the state law actually

conflicts with federal law. Plaintiffs contend that MCCA section

1396r–5(b)(1) prohibits defendants from collecting spousal support

under article X. Defendants argue that section 1396r–5(b)(1) applies

only to eligibility determinations. They emphasize eligibility language

throughout the MCCA, and also point out that the “deemed eligible”

language contained in subsection (b)(1) applies only to eligibility

determinations. We agree with defendants.

-14-

A careful review of the language of the MCCA reveals an

absence of consideration of the spousal support laws of which

plaintiffs complain. Rather, it sets out a mechanism of deeming and

diversion to implement the MCCA’s twin goals of ameliorating

spousal impoverishment and “preventing financially secure couples

from obtaining Medicaid assistance.” Blumer, 534 U.S. at 480, 151

L. Ed. 2d at 944, 122 S. Ct. at 967, citing H.R. Rep. No. 100–105, at

65 (1988). To achieve this, Congress directed that the state agency,

in making its eligibility determination, take a “snapshot” of the

couple’s current and future resources to determine what income

needed to be deemed to the institutionalized spouse and what income

needed to be diverted to the community spouse. This is indicated in

several ways.

We first examine the introductory section, subsection (a), which

reveals it is aimed at determining “eligibility,” as it states:

“(a) Special treatment for institutionalized spouses

(1) Supersedes other provisions

In determining the eligibility for medical assistance of

an institutionalized spouse *** the provisions of this

section supersede any other provision of this subchapter

*** which is inconsistent with them.” (Emphasis added.)

42 U.S.C. §1396r–5(a)(1) (2000).

This indicates the statute concerns rules enabling institutionalization

of an ailing spouse. Thus, the remainder of the statute is to be read

with this eligibility determination in mind. Notably absent from this

section is any language prohibiting a state from obtaining

reimbursement of medical expenditures through spousal support laws.

Next, we note that the MCCA’s provisions concerning “rules for

treatment of income,” found in subsection (b), relate to this eligibility

determination. It contains two subsections: (b)(1), entitled “separate

treatment of income”–the name-on-the-check rule–which relates to

deeming; and (b)(2), entitled “attribution of income,” which relates

to diversion.

The name-on-the-check rule properly assures that the Medicaid

eligibility determination for the ailing spouse takes into account only

income over which the ailing spouse has actual control. It provides:

“(1) Separate Treatment of Income

-15-

During any month in which an institutionalized spouse is

in the institution, except as provided in paragraph (2), no

income of the community spouse shall be deemed available

to the institutionalized spouse.” (Emphasis added.) 42 U.S.C.

§1396r–5(b)(1) (2000).

This provision prevents the state agency from looking at a community

spouse’s income to prevent the receipt of benefits by an ailing spouse.

Furthermore, this section of the statute does not reference spousal

support laws in any way.

Moreover, this section–the name-on-the-check rule–uses a term

of art, “deemed available,” which points to eligibility determinations.

The United States Supreme Court explained the genesis of this

“deemed available” language, stating, “Until 1989, the year the

MCCA took effect, States generally considered the income of either

spouse to be ‘available’ to the other. We upheld this approach in Gray

Panthers, observing that ‘from the beginning of the Medicaid

program, Congress authorized States to presume spousal support.’ ”

Blumer, 534 U.S. at 479, 151 L. Ed. 2d at 944, 122 S. Ct. at 967,

quoting S. Rep. No. 89–404, at 78 (1965), reprinted in 1965

U.S.C.C.A.N. 1943, 2018. The Court then described how the MCCA

changed this determination after 1989–providing that a spouse’s

income shall not be deemed available to the other. It stated, referring

to subsection (b)(1), “The community spouse’s income is thus

preserved for that spouse and does not affect the determination

whether the institutionalized spouse qualifies for Medicaid. In

general, such income is also disregarded in calculating the amount

Medicaid will pay for the institutionalized spouse’s care after

eligibility is established.” Blumer, 534 U.S. at 480-81, 151 L. Ed. 2d

at 944, 122 S. Ct. at 967. Further, as the United States Supreme Court

observed in Blumer, this “deemed available” language applied to the

couple’s resources as well. Blumer, 534 U.S. at 479-80, 151 L. Ed. 2d

at 944, 122 S. Ct. at 967 (“Similarly, assets held jointly by the couple

were commonly deemed ‘available’ in full to the institutionalized

spouse” (emphasis added)). Accordingly, subsection (b)(1) must be

construed in light of the MCCA mechanisms to avoid spousal

impoverishment and prevent financially secure couples from

receiving benefits. Indeed, our research reveals that prior courts have

only construed this language in terms of its effect on the

-16-

institutionalized spouse’s eligibility. See, e.g., Arkansas Department

of Health & Human Services v. Smith, 370 Ark. 490, ___ S.W.3d ___

(2007); In re Estate of Tomeck, 8 N.Y.3d 724, 872 N.E.2d 236, 840

N.Y.S.2d 550 (2007); King v. Secretary, Louisiana Department of

Health & Hospitals, 956 So. 2d 666 (La. App. 2007).

The next “rule for treatment of income,” subsection (b)(2),

provides guidance for “determining the income of an institutionalized

spouse or community spouse for purposes of the post-eligibility

income determination described in subsection (d).” 42 U.S.C.

§1396r–5(b)(2) (2000). The language of subsection (b)(2) is limited

to attributing income between spouses to provide the income values

needed in subsection (d) and was not directed to state spousal support

laws. In turn, subsection (d) is entitled “Protecting income for

community spouse” and refers to a procedure for raising an

impoverished community spouse’s income. 42 U.S.C. §1396r–5(d)

(2000). Subsections (d)(1)(B), (d)(2), and (d)(3) provide for the

allocation of available income from the institutionalized spouse to the

community spouse to maintain a minimum monthly income, or

MMMNA, when the community spouse’s own income is below that

level. 42 U.S.C. §1396r–5(d)(2) (2000). Subsection (2) defines the

difference between the MMMNA and the community spouse’s

income as the “community spouse monthly income allowance.” 42

U.S.C. §1396r–5(d)(2) (2000). The community spouse monthly

income allowance, along with other allowances defined in subsection

(d), is deducted from the institutionalized spouse’s income before

determining the amount of the institutionalized spouse’s income, as

determined in subsection (b), must be paid toward the costs of

institutional care. Thus, Congress intended subsection (d) to prevent

impoverishment of the community spouse by permitting income to be

allocated to that spouse from the institutionalized spouse when

necessary. This provision is not directed at spousal support laws such

as article X, where the community spouse may be required to

reimburse the state for some of the cost of care provided to the

institutionalized spouse.

Finally, the remainder of the MCCA regarding the CSRA,

MMMNA and the “fair hearing” is peppered with language referring

to the eligibility determination when the agency takes its “snapshot.”

See 42 U.S.C. §§1396r–5(c)(1) (“Computation of spousal share at

-17-

time of institutionalization”), 1396(c)(1)(A) (“There shall be

computed [ ]as of the beginning of the first continuous period of

institutionalization”), 1396r–5(c)(1)(B) (“At the request of an

institutionalized spouse or community spouse, at the beginning of the

first continuous period of institutionalization”), 1396r–5(c)(2)

(“Attribution of resources at time of initial eligibility determination[.]

*** In determining the resources of an institutionalized spouse at the

time of application for benefits under this subchapter”),

1396r–5(d)(1) (“After an institutionalized spouse is determined or

redetermined to be eligible for medical assistance”), 1396r–5(e)(1)(A)

(“a determination of eligibility”), 1396r–5(e)(2)(A) (“If either ***

spouse is dissatisfied with a determination of”), 1396r–5(e)(2)(A)

(“with respect to such determination if an application for benefits

under this subchapter has been made on behalf of the institutionalized

spouse”). These provisions indicate that the MCCA is only concerned

with “diversion” after eligibility has been determined. It makes no

further provisions for the income of a community spouse which may

be above the MMMNA, except to the extent that a community spouse

may request a “fair hearing” to raise the MMMNA or CSRA.

Thus, the community spouse’s income becomes an issue only

when he or she does not receive sufficient income to cover the basic

costs of living. In that case, he or she may seek, through a “fair

hearing,” a portion of the institutionalized spouse’s income to help

defray necessary costs.5 This accords with the purposes of the Act: to

prevent impoverishment of the community spouse and to prevent

financially secure couples from receiving benefits. As the court

illustrated in Blumer,

“Although that hearing is conducted preeligibility, its purpose

is to anticipate the posteligibility financial situation of the

couple. The procedure seeks to project what the community

spouse’s income will be when the institutionalized spouse

becomes eligible. See Tr. of Oral Arg. 14 (officer conducting

5

Plaintiffs do not argue that defendants’ spousal support provisions

threaten to impoverish them in violation of the MCCA. They further do not

argue that they could potentially make use of this fair hearing mechanism

in order to protect any of their income from defendants spousal support

order.

-18-

(e)(2)(c) hearing makes a calculation that ‘concerns the post

eligibility period’; question is will ‘the at-home spouse ...

have sufficient income in the post eligibility period, or does

the resource allowance need to be jacked up in order to

provide that additional income’). The hearing officer must

measure that projected income against the MMMNA, a

standard that, like the CSMIA, is operative only

posteligibility.” (Emphases in original.) Blumer, 534 U.S. at

491, 151 L. Ed. 2d at 951, 122 S. Ct. at 973.

Accordingly, while the MCCA addresses the posteligibility income

of a potentially impoverished spouse, it says nothing about the state’s

ability to seek reimbursement from an otherwise financially secure

community spouse.

The plaintiffs further argue the appellate court improperly limited

the MCCA to the first eligibility determination, pointing out that

eligibility is an ongoing, monthly proposition. But the court did not

do so; it merely stated that the eligibility determination does not

include issues of ongoing spousal support owed to the state. 372 Ill.

App. 3d at 1029. Nevertheless, although an institutionalized spouse’s

Medicaid eligibility may be redetermined each month, this is

irrelevant to the community spouse’s state-law obligation to pay

spousal support when their community-spouse income exceeds the

MMMNA.

We therefore find that the MCCA does not preempt article X of

the Public Aid Code. Accordingly, the appellate court correctly

reversed the trial court’s grant of declaratory, injunctive, and other

relief to the plaintiffs.

CONCLUSION

For the foregoing reasons, we find that plaintiffs were not

required to exhaust administrative remedies and that the MCCA does

not preempt article X of the Public Aid Code. Therefore, we affirm

the judgment of the appellate court which reversed the trial court.

Affirmed.

-19-