“The Social Security Act is among the most intricate ever drafted by Congress. Its Byzantine construction . . . makes the Act almost unintelligible to the uninitiated.”
How later courts described this case
- “The Social Security Act is among the most intricate ever drafted by Congress. Its Byzantine construction . . . makes the Act almost unintelligible to the uninitiated.”
Written by the judges who cited it.
The opinion
Supreme Court of Texas
══════════
No. 22-0437
══════════
Texas Health and Human Services Commission,
Petitioner,
v.
Estate of Clyde L. Burt, Linda S. Wallace, Executor, and
Linda S. Wallace,
Respondents
═══════════════════════════════════════
On Petition for Review from the
Court of Appeals for the Third District of Texas
═══════════════════════════════════════
CHIEF JUSTICE HECHT, joined by Justice Boyd and Justice Devine,
dissenting.
For 36 years, Clyde and Dorothy Burt lived in a home on Green
River Trail. They then sold it to their daughter and son-in-law, the
Wallaces, and rented another home the Wallaces owned. After seven
years there, and a few weeks before their 89th birthdays and 70th
wedding anniversary, the Burts moved into a skilled-nursing facility,
intending to apply for Medicaid. To be eligible, their resources couldn’t
exceed $3,000, excluding their home. 1
So, the Burts repurchased a half interest in their long-time Green
River Trail home for fair market value. This purchase reduced their
worldly possessions from not quite $65,000 cash to just over $2,000.
They completed an HHSC form that same day, stating that they
considered Green River Trail to be their “home and principal place of
residence”, that their absence was “temporary”, and that they intended
to “return to live in [their] home in the future, if possible.” It was not to
be. Within three months, Clyde passed from this life, and Dorothy
followed two months behind him.
The Burts’ Medicaid application would’ve covered a few weeks’
health costs—a little less than $24,000. But HHSC denied the Burts’
Medicaid application, concluding that Green River Trail couldn’t have
been their home because they never lived there after buying the half
interest from the Wallaces. The trial court reversed, and the court of
appeals affirmed the trial court. 2 The Court reverses both lower courts
based on its reading of the word “home”. But its reading, unlike those of
the courts below, conflicts with controlling regulations and the design of
the Social Security Act. In the Court’s view, the Burts’ avowed intent of
returning to Green River Trail to live out the last of their days wasn’t
wise planning and romantic aspiration, but deceptive, “artificial
impoverishment” to abuse Medicaid and “saddle future generations with
obligations to the few who undertake elaborate estate planning to
1 42 U.S.C. § 1382(a)(2)(B), (a)(3)(A).
2 644 S.W.3d 888, 890 (Tex. App.—Austin 2022).
2
impoverish their elderly parents,” 3 all of which is very unfairly said of
the Burts. 4 I respectfully dissent.
I
The federal statute governing Medicaid eligibility provides that
in determining an applicant’s resources, the “home” is excluded 5 but
doesn’t define the word. The Court looks to dictionary definitions as it
often does when statutory terms are undefined. But Texas law provides
that in determining Medicaid eligibility, HHSC “follows” 20 C.F.R.
§ 416.1212 “regarding the treatment of the home”. 6 That regulation does
define “home”. Looking to dictionary definitions is thus foreclosed.
Specifically, Section 416.1212(a) defines a “home” as: “any
property in which an individual (and spouse, if any) has an ownership
interest and which serves as the individual’s principal place of
residence.” 7 The Court argues that “[t]o reside and live in a place, . . .
one must occupy it.” 8 But Section 416.1212(c) provides that “[i]f an
individual (and spouse, if any) moves out of his or her home without the
intent to return, the home becomes a countable resource because it is no
3 Ante at 11, 15 n.43.
4 A word of caution: De mortuis nihil nisi bonum. Diogenes Laertius,
The Lives and Opinions of Eminent Philosophers 33 (4th cent. A.D.) (quoting
Chilon of Sparta, 6th cent. B.C.) (London: G. Bell & Sons, Ltd. 1915). The Burts
need not have been ill-motivated to have been wrong on Medicaid law.
Actually, they were neither.
5 47 U.S.C. § 1382b(a)(1).
6 1 TEX. ADMIN. CODE § 358.348.
7 20 C.F.R. § 416.1212(a).
8 Ante at 8-9.
3
longer the individual’s principal place of residence.” 9 The reasonable
implication is that if an individual moves out with the intent to return,
the home remains his principal residence.
That reading of subsection (c) is borne out by subsection (d),
which provides that if a beneficiary flees a home due to domestic abuse,
the home nevertheless remains the person’s principal place of residence,
even without an intent to return, until a “new” principal place of
residence is established. In effect, an intent to return to the home is
presumed, however unlikely, until affirmatively rejected, and the home
isn’t a countable resource even though the domestic abuse victim has
moved out. 10
The Court argues that the Burts couldn’t have intended to return
to Green River Trail after buying an interest from the Wallaces because
they didn’t reside there in the “years preceding” their Medicaid claim. 11
But the Burts had occupied their Green River Trail home before
applying for Medicaid—for 36 years. That they’d lived in a rental home
for seven years in the interim doesn’t detract from the fact that in
acquiring a half interest in the home and entering nursing care, they
were hoping to return to their long-time home. It was their very real and
9 20 C.F.R. § 416.1212(c) (emphasis added).
10 Id. § 416.1212(d) (“If an individual moves out of his or her home
without the intent to return, but is fleeing the home as a victim of domestic
abuse, we will not count the home as a resource in determining the individual’s
eligibility to receive, or continue to receive, SSI payments. In that situation,
we will consider the home to be the individual’s principal place of residence
until such time as the individual establishes a new principal place of residence
or otherwise takes action rendering the home no longer excludable.”).
11 Ante at 14.
4
poetic goal, as they expressly affirmed. As the Court acknowledges, if
the Burts had sold to the Wallaces and rented from them for even one
day before repurchasing their half interest in the home, the Court
wouldn’t dispute that they were intending to “return” to the home they
had long occupied. If anything, being removed from their long-time home
for seven years only inspired the Burts to return.
According to the Court, HHSC is concerned that “an applicant
[may] exclude any interest acquired after the claim for [Medicaid]
assistance arises based on the applicant’s declared intent to make it a
future home.” 12 Whatever the merits of that concern, this isn’t that case.
The court of appeals argued that an applicant’s subjective view of
a place as home should control, pointing to the Social Security
Administration Program Operations Manual System’s definition of
“principal place of residence” as “the dwelling the individual considers
[his or her] established or principal home and to which, if absent, [he or
she] intend[s] to return.” 13 The Manual provides, as the Court notes,
that the “intent to return” requirement “applies only to the continued
exclusion of property which met the definition of the individual’s home
prior to the time the individual left the property.” 14 From this the Court
asserts that considering a house a home doesn’t negate an occupancy
requirement. 15 But the Manual states that a “right to use for life” is
12 Ante at 7.
13 Social Security Administration, Program Operations Manual System
SI 01130.100.A.2 (Dec. 28, 2023) (available at https://bit.ly.496h268) (emphasis
added).
14 Ante at 17.
15 Id.
5
evidence of ownership 16 and that when an individual owns only “one
residence”, HHSC should “assume that the alleged home is the
individual’s principal place of residence.” 17
Importantly, the Manual instructs that an applicant’s
“statement” regarding their intent to return is dispositive unless it is
“self-contradictory”, 18 a term the Manual defines clearly and narrowly. 19
The Burts’ statement of intent to return to Green River Trail was clear,
unambiguous, and internally consistent. Under the Manual, the Burts’
intent to return to their long-term home should not be an issue. The
Court’s occupancy requirement thus conflicts with the Manual. The
Court discounts the Manual as not having the force and effect of law
without acknowledging that given its use in administering the Medicaid
program, it should certainly, at the very least, be considered
informative. 20
16 Program Operations Manual System, at SI 01130.100.C.4.
17 Id. at SI 01130.100.C.5.a. As the Court notes, the Manual provides
that the assumption that an alleged home is the individual’s principal place of
residence may be overcome only when there is “ownership in more than one
residence or evidence that raises a question about the matter.” Ante at 17 n.50.
The Court risks much in reading and applying that provision. First, it ignores
that the most natural reading of “evidence that raises a question about the
matter”, is “evidence that raises a question about ownership”. And HHSC
doesn’t challenge the validity of the Burts’ ownership interest, their life estate,
here. Second, having assumed that its reading is correct, the Court points only
to its own novel judicial creation—its prior-occupancy requirement—as
“evidence that raises a question”. Id. Finally, after having begged the question,
the Court also fails to point to anything in the Manual, administrative
guidance, or caselaw that supports its interpretation.
18 Id. at SI 01130.100.E.1.
19 Id. at SI 01130.100.E.2.
20 And perhaps more than just informative. The U.S. Supreme Court
6
All of this should be for another day. Very literally, when the
Burts applied for Medicaid, they owned a home they’d occupied before
entering a nursing facility, they considered it to be their established or
principal home, and they intended to return to it.
II
The injustice the Burts suffer today is only compounded by the
Court’s and HHSC’s position: that if only the Burts had bought the half
interest in their home from the Wallaces and lived there for a day on
their way to the nursing facility—if only they’d acted in reverse order—
the value of their interest would’ve been excluded from their assets as a
home in determining their Medicaid eligibility. So as long as elderly
Medicaid applicants have read today’s opinion, they can avoid falling
into the trap that ensnared the Burts. At least some can, as the court of
appeals noted:
has upheld Congress’s explicit delegation of “broad authority” to the Secretary
of the U.S. Department of Health and Human Services “to promulgate
regulations defining eligibility requirements for Medicaid.” Schweiker v. Gray
Panthers, 453 U.S. 34, 43 (1981). Thus, the Secretary’s definition of “available”
resources is entitled “to more than mere weight or deference”—it’s entitled to
“legislative effect”. Id. at 44. Section 1396a, which governs state-run Medicaid
plans is littered with cross-references to the SSI program, and in particular,
its resource-counting methodology. See 42 U.S.C. § 1396a(a)(10)(C)(i),
(a)(10)(G), (a)(17), (m)(1). For instance, state plans must “comply with the
provisions of [§] 1396p”, which regulates “transfers of assets”, id.
§ 1396a(a)(18), and incorporates SSI’s definition of “resources” from
Section 1382b, id. § 1396p(c)(5) (citing id. § 1382b). Section 1382b itself
provides that the Commissioner of the Social Security Administration “shall
prescribe” the “time [and] manner in which, various kinds of property must be
disposed of in order not to be included in determining an individual’s eligibility
for benefits.” Id. § 1382b(b). Finally, as mentioned previously, the Texas
Commission expressly claims to follow the Social Security Administration’s
regulatory definition of “home”. 1 TEX. ADMIN. CODE § 358.348(a).
7
Under [HHSC]’s argument, an applicant can exempt his
home if he lives there for one day before entering a nursing
facility, but an applicant living in an apartment and in the
process of buying a home who, the day before closing,
suffers a fall requiring nursing care cannot. 21
But even if that catastrophe is unlikely, and the Court’s decision were
mostly fixable, the court of appeals’ concern lingers:
Such a distinction is not supported by the language found
in the various federal statutes and rules, makes no
practical sense, and in no way advances the purposes
behind the assistance programs in question. 22
The Court’s textually untethered decision carries a high risk of
interfering with the especially “intricate” 23 and delicate legal machinery
of Medicaid, SSI, and other federal programs. For instance, 20 C.F.R.
§ 416.1212(d) provides that a beneficiary who flees her principal place
of residence because of domestic abuse doesn’t lose her benefits, as the
prior residence—occupied by her abuser—remains excludable and is
still “consider[ed] to be the individual’s principal place of residence”. 24
That residence remains excludable “until such time as [she] establishes
a new principal place of residence”. 25 Under the Court’s view, however,
a beneficiary who was a victim of domestic abuse couldn’t establish a
21 644 S.W.3d at 895.
22 Id.
23 Gray Panthers, 453 U.S. at 43 (“The Social Security Act is among the
most intricate ever drafted by Congress. Its Byzantine construction . . . makes
the Act almost unintelligible to the uninitiated.”) (internal quotation marks
omitted).
24 20 C.F.R. § 416.1212(d).
25 Id.
8
“new principal place of residence” by buying a new home because she
never would’ve occupied it before applying for benefits. Thus, she
couldn’t intend to “return” there. The Court dismisses the inconsistency
as an exception to the occupancy requirement. 26 But given that such a
requirement is nowhere mentioned in the regulation, the specific
treatment of a domestic-violence victim’s home is better read as
confirmation that no general occupancy requirement exists than as an
exception to one never actually mentioned.
The Court’s judicially created prior-occupancy requirement would
also interfere with other federal programs. In 2014, Congress enacted
the Achieving a Better Life Experience (“ABLE”) Act. 27 This Act
authorizes the creation of tax-advantaged savings accounts to shelter
funds, subject to a funding ceiling. 28 Importantly, any qualifying
disbursements from ABLE accounts are prohibited from affecting a
person’s eligibility for government assistance.
Before ABLE accounts became widely available, “saving money
proved challenging for many people living with a disability because
[government] programs often have income and resource limits.” 29 But
today, disabled beneficiaries can save and invest substantial sums and
26 Ante at 14.
27 Spotlight on ABLE Accounts, U.S. SOC. SEC. ADMIN. (last accessed
Apr. 29, 2024), http://tinyurl.com/2mv8aa8m.
28 ABLE accounts can help people with disabilities pay for
disability-related expenses, INTERNAL REVENUE SERV. (July 25, 2022),
http://tinyurl.com/336pwspu.
29 ABLE Act: What You Need to Know, SOC. SEC. MATTERS (Dec. 17,
2020), http://tinyurl.com/3ah36rvp.
9
may also withdraw funds without penalties 30 for Qualified Disability
Expenses, a category that includes “[h]ousing” expenses. 31 Several
states, including Texas, 32 have implemented ABLE programs. And
many disabled beneficiaries on SSI and Medicaid have since relied on
the QDE exemption to buy their first homes. 33
It stands to reason that a new home purchased with ABLE funds
must itself be excludable, even though a beneficiary hasn’t previously
occupied it. Indeed, that very fact is a feature—not a bug—in the
program. The ABLE Act was meant to provide opportunities for
financial security and independence previously inaccessible to disabled
beneficiaries.
The Court’s prior-occupancy requirement would force disabled
beneficiaries (except those fortunate few who’ve already got homes
before applying for assistance) into a Hobson’s choice: you may have
housing independence, but only if you’re willing to give up your federal
aid. Stated differently, once you’re on government assistance, “you’ll
30 Specifically, without tax consequences and without losing eligibility
for government assistance programs like Medicaid.
31 26 CFR § 1.529A-2(h); SSA, Spotlight on ABLE Accounts.
32 Home, TEXAS|ABLE (last accessed Apr. 29, 2024),
https://www.texasable.org/.
33 Molly Grace, How people with disabilities can use an ABLE account
to buy a house, BUSINESS INSIDER (Dec. 4, 2023, 4:39 PM),
http://tinyurl.com/ykr8xn8j; Robin Rothstein & Chris Jennings, How to Buy a
Home if You Have Disabilities, FORBES (Aug. 1, 2023),
http://tinyurl.com/vwuweduv; Home, IL|ABLE (last accessed Apr. 29, 2024),
https://illinoisable.com/; FAQ About ABLE Accounts, CAL. DEP’T SOC. SERVS.
(last accessed Apr. 29, 2024), http://tinyurl.com/yckactmc (explaining that
QDEs may be used for the “[p]urchase of a primary residence”); see also infra
note 35.
10
own nothing, and you’ll be happy.”
This entirely avoidable outcome frustrates one of the Act’s central
goals of “improving [the] health, independence, or quality of life [of]
designated beneficiar[ies].” 34 It ignores the realities of how this system
(as designed) is actually working. Disabled beneficiaries are becoming
first-time homeowners without losing their benefits. 35 More
importantly—in disregard of the Act’s text, which states that “[h]ousing”
counts as a qualified disability expense—the Court renders hollow the
promise that QDEs won’t affect a beneficiary’s “eligibility for
government assistance programs.” 36
The Court offers that its holding “does not interfere” with an
ABLE account holder’s “ability to purchase a new home”. 37 But disabled
beneficiaries with ABLE accounts and elderly applicants like the Burts
can’t be subject to disparate eligibility criteria under federal law, which
requires eligibility standards in state-run programs to be “comparable
for all groups”. 38 The Court’s holding leaves the concern that when an
34 26 CFR § 1.529A-2(h).
35 See, e.g., Home, IL|ABLE (last accessed Apr. 29, 2024), (“Having an
IL ABLE Account made it possible for me to save to buy my first home.”
(emphasis added)), (“Now our daughter can save for a wide range of things such
as . . . purchasing an apartment” (emphasis added)).
36 ABLE accounts, IRS; see also FAQs, TEXAS|ABLE (last accessed Apr.
29, 2024), https://www.texasable.org/faqs/ (“Any funds you withdraw that [are]
used to pay for a Qualified Disability Expense . . . will [not] be considered an
asset for purposes of determining your eligibility for . . . Medicaid, SSI and
SSDI. Any withdrawal for housing expenses that is . . . spent in the month the
withdrawal is received will also [not] be considered an asset for SSI
purposes.”).
37 Ante at 15 n.46.
38 42 U.S.C. § 1396(a)(17). See Mississippi v. Sullivan, 951 F.2d 80,
11
ABLE account holder in Texas purchases a “new” house without having
previously resided there, the new house won’t qualify as an excludable
“home” for Medicaid eligibility purposes.
III
Finally, as the court of appeals noted, an occupancy requirement
disadvantages renters by denying them, in the Court’s words, “the
preservation of a home after nursing care [in contravention of]
Medicaid’s purpose of promoting a return to independence.” 39 Here is
the Court’s response:
The [federal Medicaid] statute . . . returns a Medicaid
applicant to the type of residence the applicant occupied
before the claim for assistance arose. . . . The resources
statute endeavors to calculate the funds available for care
based on an applicant’s living situation before the claim for
assistance arises; it does not permit the applicant to change
the nature of that residence (from renting to owning or
from a real property interest to a home) by converting
assets that otherwise are available to pay for the
applicant’s care.
As support, the Court points to the use of a “look-back date . . . to
scrutinize eligibility” but fails to note that under the relevant statute,
an applicant is only rendered ineligible for Medicaid by transferring
83-84 (5th Cir. 1992) (“The structure of the Act supports [the] view that
subsection (a)(17) was meant to ensure comparability between groups”; a state
“would violate subsection (a)(17) if it had one eligibility rule for the [disabled]
group and another for the aged group”) (emphasis in original).
39Ante at 10 (citing 42 U.S.C. § 1396-1 (stating that the purpose of
Medicaid is “to furnish . . . rehabilitation and other services to help [disabled
and disadvantaged families and] individuals attain or retain capability for
independence or self-care”)).
12
property “for less than fair market value”. 40 A look-back date is
irrelevant when, as in this case, it is undisputed that the Burts
reacquired an interest in their home for fair market value. The Court
cites nothing in federal law that would disqualify a Medicaid applicant
who has been living in rented space, faces the need for covered medical
care, and buys a home to provide for future restoration to healthy and
independent life, even if, in so doing, he reduces his resources for
eligibility.
To the contrary, as we have explained, federal law incentivizes
Medicaid applicants to provide wisely for their future. Federal law
cannot be reasonably construed to limit Medicaid applicants’ efforts to
care for themselves if they happened to be renters before they applied
for benefits. It may be, as the Court observes, that “Congress has sought
to preclude artificial impoverishment, repeatedly narrowing Medicaid
eligibility to minimize abuse of the program and to conserve government
resources for those most in need.” 41 There is nothing to indicate,
however, that Congress perversely provided that the more
disadvantaged one is in applying for Medicaid, the less benefit it
provides—much less that the benefits structure intentionally
discriminates against renters.
* * * * *
“Home,” Robert Frost wrote, “is the place where, when you have
to go there, They have to take you in.” 42 Green River Trail was home to
40 42 U.S.C. § 1396p(c)(1)(A) (emphasis added).
41 Ante at 11.
42 Robert Frost, The Death of the Hired Man.
13
the Burts when they applied for Medicaid. I would affirm the court of
appeals. I respectfully dissent.
Nathan L. Hecht
Chief Justice
OPINION FILED: May 3, 2024
14