WISCONSIN DEPARTMENT OF HEALTH AND FAMILY SERVICES v. BLUMER

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473 OCTOBER TERM, 2001
Syllabus
WISCONSIN DEPARTMENT OF HEALTH AND
FAMILY SERVICES v. BLUMER
certiorari to the court of appeals of wisconsin
No. 00–952. Argued December 3, 2001—Decided February 20, 2002
In developing standards for determining Medicaid eligibility, partici-
pating States must “tak[e] into account only such income and resources
as are, as determined in accordance with standards prescribed by the
Secretary [of Health and Human Services (Secretary)], available to the
applicant.” 42 U. S. C. § 1396a(a)(17)(B) (emphasis added). Because
spouses typically possess assets and income jointly and bear financial
responsibility for each other, Medicaid eligibility determinations for
married applicants have resisted simple solutions. Until the Medicare
Catastrophic Coverage Act of 1988 (MCCA or Act), state standards
often left a spouse living at home (called the “community spouse”) des-
titute, the couple’s assets drained to qualify his or her mate (the “institu-
tionalized spouse”) for Medicaid, and the couple’s posteligibility income
diminished to reduce the amount payable by Medicaid for institutional
care. The MCCA’s “spousal impoverishment” provisions responded to
this problem by including in the Medicaid statute requirements with
which States must comply in allocating a couple’s income and resources.
The Act’s income allocation rules direct that, in any month in which one
spouse is institutionalized, “no income of the community spouse shall
be deemed available to the institutionalized spouse,” § 1396r–5(b)(1);
require States to set for the community spouse a “minimum monthly
maintenance needs allowance” (MMMNA), § 1396r–5(d)(3); and prescribe
that, if the community spouse’s posteligibility income is insufficient
to yield income equal to or above the MMMNA, the shortfall—called
the “community spouse monthly income allowance” (CSMIA)—may be
deducted from the institutionalized spouse’s income and paid to the
community spouse, § 1396r–5(d)(1)(B). The MCCA’s resource allocation
rules provide, inter alia, that, in determining the institutionalized
spouse’s Medicaid eligibility, a portion of the couple’s resources—called
the “community spouse resource allowance” (CSRA)—shall be re-
served for the benefit of the community spouse, § 1396r–5(c)(2). To cal-
culate the CSRA, the couple’s jointly and separately owned resources
are added together as of the time the institutionalized spouse’s insti-
tutionalization commenced; half of that total, subject to certain limits,
is then allocated to the community spouse, §§ 1396r–5(c)(1)(A), (2)(B),
(f)(2)(A), (g). The CSRA is deemed unavailable to the institutionalized

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474 WISCONSIN DEPT. OF HEALTH AND FAMILY SERVS.
v. BLUMER
Syllabus
spouse in the eligibility determination, but all resources above the
CSRA (excluding a $2,000 personal allowance reserved for the institu-
tionalized spouse under federal regulations) must be spent before eli-
gibility can be achieved, § 1396r–5(c)(2). Section 1396r–5(e)(2)(C) pro-
vides a “fair hearing” mechanism through which a couple may obtain a
higher CSRA by establishing that the standard CSRA (in relation to
the amount of income it generates) is inadequate to raise “the commu-
nity spouse’s income” to the MMMNA. The States have employed two
methods for making this determination; the two methods differ in their
construction of the subsection (e)(2)(C) term “community spouse’s in-
come.” Under the “income-first” method used by most States, “commu-
nity spouse’s income” includes not only the community spouse’s actual
income at the time of the eligibility hearing, but also an anticipated
posteligibility CSMIA authorized by § 1396r–5(d)(1)(B). The income-
first method, because it takes account of the potential CSMIA, makes
it less likely that the CSRA will be increased; it therefore tends to
require couples to expend additional resources before the institutional-
ized spouse becomes Medicaid eligible. In contrast, the “resources-
first” method employed in the remaining States excludes the CSMIA
from consideration. The Secretary has circulated for comment a pro-
posed rule allowing States the threshold choice of using either the
income-first or resources-first method.
After entering a Wisconsin nursing home, respondent Irene Blumer
applied for Medicaid through her husband Burnett. The Green County
Department of Human Services (County) determined that the Blumers
could retain $74,822 in assets—$72,822 as Burnett’s standard CSRA and
$2,000 as Irene’s personal allowance. The County next found that, as
of the date of Irene’s application, the couple possessed resources exceed-
ing their $74,822 limit by $14,513. The County accordingly concluded
that Irene would not be eligible for Medicaid until the couple’s spending
reduced their resources by the $14,531 amount. Irene sought a hearing
to obtain a higher CSRA, arguing that, because Burnett’s monthly in-
come ($1,639) fell below the applicable MMMNA ($1,727), the hearing
examiner was obliged to increase Burnett’s CSRA. Because a Wiscon-
sin statute adopts the income-first rule, the examiner concluded that he
lacked authority to increase Burnett’s CSRA: The difference between
Burnett’s posteligibility income and the MMMNA could be erased if,
after achieving eligibility, Irene transferred to Burnett, as a CSMIA, a
portion of her monthly income. Because Irene’s posteligibility income
would be sufficient to allow the transfer, the examiner found no reason
to reserve additional assets for Burnett and, consequently, no cause for
advancing Irene’s Medicaid eligibility. The Circuit Court affirmed, but

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the Wisconsin Court of Appeals reversed, concluding that the State’s
income-first statute conflicts with the MCCA, which, the appeals court
held, unambiguously mandates the resources-first method.
Held: The income-first method qualifies as a permissible interpretation of
the MCCA. Pp. 489–498.
(a) Neither § 1396r–5(e)(2)(C)’s text nor the MCCA’s structure forbids
Wisconsin’s approach. This case turns on whether the words “commu-
nity spouse’s income” in § 1396r–5(e)(2)(C) may be interpreted to include
potential, posteligibility transfers of income from the institutionalized
spouse permitted by § 1396r–5(d)(1)(B). According to Blumer, the plain
meaning of “community spouse’s income” precludes such inclusion; by
choosing the possessive modifier “community spouse’s,” Blumer main-
tains, Congress clearly expressed its intent that only income actually
possessed by the community spouse at the time of the hearing may count
in the calculation. The Court rejects this argument. Use of the pos-
sessive case does not demand construction of the quoted phrase to mean
only income actually possessed by, rather than available or attributable
to, the community spouse; to the contrary, use of the possessive is often
indeterminate. Cf., e. g., Smiley v. Citibank (South Dakota), N. A., 517
U. S. 735, 739. The Court finds similarly unpersuasive Blumer’s argu-
ment that the Act’s design as a whole precludes use of the income-first
method. In this regard, Blumer contends that, because the (e)(2)(C)
hearing to obtain an enhanced CSRA occurs at the time an eligibility
assessment is conducted, while no CSMIA income may be transferred
until after eligibility has been achieved, the Wisconsin statute reverses
the priority ordered by the MCCA. The Court disagrees with Blumer’s
conclusion: The (e)(2)(C) hearing is properly comprehended as a pre-
eligibility projection of the couple’s posteligibility financial situation;
it is not unreasonable for a State to include in its estimation of the
“community spouse’s income” in that posteligibility period an income
transfer the law permits at that time. The same misunderstanding of
the (e)(2)(C) hearing also underlies the contention that the income-first
method renders meaningless § 1396r–5(b)(1)’s key prohibition against
deeming income of the community spouse available to the institutional-
ized spouse. This argument confuses the inclusion of an anticipated
CSMIA in the preeligibility calculation of the community spouse’s
posteligibility income with the actual transfer of income permitted by
the CSMIA provision. Far from precluding Wisconsin’s approach, the
MCCA’s design offers affirmative support for the income-first method.
Subsection (b)(1) has no counterpart prohibiting attribution of the insti-
tutionalized spouse’s income to the community spouse. Indeed, § 1396r–
5(d)(1)(B) specifically permits a transfer of income from the institution-

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476 WISCONSIN DEPT. OF HEALTH AND FAMILY SERVS.
v. BLUMER
Syllabus
alized spouse to the community spouse through the CSMIA. Mindful
that spouses may be expected to support each other, see, e. g., Schweiker
v. Gray Panthers, 453 U. S. 34, 45, the Court is satisfied that a State
reasonably interprets the MCCA by anticipating the CSMIA in the
(e)(2)(C) hearing. This conclusion is bolstered by a further considera-
tion: A fair hearing is not limited to a CSRA redetermination, but
may also be used to adjust the CSMIA itself, § 1396r–5(e)(2)(A)(i); there-
fore, it cannot be concluded that the States are barred from taking
account of the potential CSMIA in the hearing to increase the CSRA.
Pp. 489–495.
(b) Because the parties have not also disputed the permissibility of
the resources-first approach, this Court does not definitively resolve
that matter. The Court notes, however, that the leeway for state
choices urged by Wisconsin and the United States is characteristic
of the Medicaid statute, which is designed to advance cooperative
federalism. See Harris v. McRae, 448 U. S. 297, 308. When inter-
preting other statutes so structured, the Court has left a range of
permissible choices to the States, at least where the superintending
federal agency has concluded that such latitude is consistent with the
statute’s aims. See, e. g., Batterton v. Francis, 432 U. S. 416, 429–431.
The Secretary, who possesses authority to prescribe standards rele-
vant here, § 1396a(a)(17), has proposed a rule explicitly recognizing that
the MCCA permits both the income-first and resources-first methods.
That position statement warrants respectful consideration. Cf., e. g.,
Gray Panthers, 453 U. S., at 43–44. The MCCA affords the States
large discretion regarding two related variables: the level of the
MMMNA, § 1396r–5(d)(3), and the amount of assets the couple is per-
mitted to retain, § 1396r–5(f)(2)(A). Nothing in the Act indicates that
similar latitude is inappropriate with respect to the application of
§ 1396r–5(e)(2)(C). Eliminating a State’s discretion to choose income-
first would hinder the State’s efforts to strike its own balance in im-
plementing the Act. Lukhard v. Reed, 481 U. S. 368, 383. States that
currently allocate limited funds through income-first would have little
choice but to offset the greater expense of the resources-first method
by reducing the MMMNA or the standard CSRA. That would bene-
fit the relatively few applicant couples who possess significant re-
sources, while offering nothing to, and perhaps disadvantaging, couples
who lack substantial assets. Nothing in the Act contradicts the Secre-
tary’s conclusion that such a result is unnecessary and unwarranted.
Pp. 495–498.
2000 WI App. 150, 237 Wis. 2d 810, 615 N. W. 2d 647, reversed and
remanded.

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477 Cite as: 534 U. S. 473 (2002)
Opinion of the Court
Ginsburg, J., delivered the opinion of the Court, in which Rehnquist,
C. J., and Kennedy, Souter, Thomas, and Breyer, JJ., joined. Ste-
vens, J., filed a dissenting opinion, in which O’Connor and Scalia, JJ.,
joined, post, p. 498.
Maureen McGlynn Flanagan, Assistant Attorney General
of Wisconsin, argued the cause for petitioner. With her on
the briefs was James E. Doyle, Attorney General.
Jeffrey A. Lamken argued the cause for the United States
as amicus curiae urging reversal. With him on the brief
were Solicitor General Olson, Acting Assistant Attorney
General Schiffer, Deputy Solicitor General Kneedler, Wil-
liam Kanter, Bruce G. Forrest, Alex Azar II, Sheree R.
Kanner, Henry R. Goldberg, Carole F. Kagan, and David
R. Smith.
Mitchell Hagopian argued the cause for respondent.
With him on the brief were Eva Shiffrin and Sarah Orr.*
Justice Ginsburg delivered the opinion of the Court.
This case requires interpretation of the “spousal impov-
erishment” provisions of the Medicare Catastrophic Cover-
age Act of 1988 (MCCA or Act), 102 Stat. 754, 42 U. S. C.
§ 1396r–5 (1994 ed. and Supp. V), a complex set of instruc-
tions made part of the federal Medicaid statute. The
*Thomas C. Fox filed a brief for the American Health Care Association
as amicus curiae urging reversal.
Briefs of amici curiae urging affirmance were filed for AARP et al. by
Rochelle Bobroff, Bruce Vignery, and Michael Schuster; for the Ohio State
Bar Association et al. by William J. Browning, Eugene Whetzel, Rene H.
Reixach, and A. Frank Johns; for SeniorLAW/Legal Action of Wisconsin,
Inc., by Carol J. Wessels; and for the State Bar of Wisconsin’s Elder Law
Section by Sara Buscher and Barbara J. Becker.
A brief of amicus curiae was filed for the Medicaid agencies of 14 States
by Charles A. Miller, joined by the Attorneys General of their respective
States as follows: Bill Pryor of Alabama, Carla J. Stovall of Kansas, John
J. Farmer of New Jersey, Wayne K. Stenehjem of North Dakota, Betty D.
Montgomery of Ohio, Paul G. Summers of Tennessee, Mark L. Shurtleff
of Utah, and Christine O. Gregoire of Washington.

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478 WISCONSIN DEPT. OF HEALTH AND FAMILY SERVS.
v. BLUMER
Opinion of the Court
spousal impoverishment provisions permit a spouse living
at home (called the “community spouse”) to reserve certain
income and assets to meet the minimum monthly mainte-
nance needs he or she will have when the other spouse (the
“institutionalized spouse”) is institutionalized, usually in a
nursing home, and becomes eligible for Medicaid.
The Act shelters from diminution a standard amount of
assets (called the “community spouse resource allowance,”
“CSRA,” or “resource allowance”). The MCCA allows an
increase in the standard allowance if either spouse shows,
at a state-administered hearing, that the community spouse
will not be able to maintain the statutorily defined minimum
level of income on which to live after the institutionalized
spouse gains Medicaid eligibility.
In determining whether the community spouse is entitled
to a higher CSRA, i. e., to shelter assets in excess of the
standard resource allowance, Wisconsin, like a majority of
other States, uses an “income-first” method. Under that
method, the State considers first whether potential income
transfers from the institutionalized spouse, which the MCCA
expressly permits, will suffice to enable the community
spouse to meet monthly needs once the institutionalized
spouse qualifies for Medicaid.
Respondent Irene Blumer, whose Medicaid eligibility was
delayed by the application of petitioner Wisconsin Depart-
ment of Health and Family Services’ income-first method,
challenges that method as inconsistent with the MCCA pro-
vision governing upward revision of the community spouse
resource allowance, § 1396r–5(e)(2)(C) (1994 ed.). The Wis-
consin Court of Appeals upheld her challenge. We reverse
that court’s judgment. Neither the text of § 1396r–5(e)(2)(C)
nor the structure of the MCCA, we conclude, forbids Wiscon-
sin’s chosen approach. Consistent with the position adopted
by the Secretary of Health and Human Services, we hold
that the income-first method represents a permissible inter-
pretation of the Act.

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Opinion of the Court
I
A
The federal Medicaid program provides funding to States
that reimburse needy persons for the cost of medical care.
See Social Security Act, tit. XIX, as added, 79 Stat. 343, and
as amended, 42 U. S. C. § 1396 et seq. (1994 ed. and Supp. V).
“Each participating State develops a plan containing reason-
able standards . . . for determining eligibility for and the
extent of medical assistance” within boundaries set by the
Medicaid statute and the Secretary of Health and Human
Services. Schweiker v. Gray Panthers, 453 U. S. 34, 36–37
(1981) (internal quotation marks omitted); § 1396a(a)(17)
(1994 ed.).1 In formulating those standards, States must
“provide for taking into account only such income and re-
sources as are, as determined in accordance with standards
prescribed by the Secretary, available to the applicant.”
§ 1396a(a)(17)(B) (emphasis added).
Because spouses typically possess assets and income
jointly and bear financial responsibility for each other, Med-
icaid eligibility determinations for married applicants have
resisted simple solutions. See, e. g., id., at 44–48. Until
1989, the year the MCCA took effect, States generally con-
sidered the income of either spouse to be “available” to
the other. We upheld this approach in Gray Panthers, ob-
serving that “from the beginning of the Medicaid program,
Congress authorized States to presume spousal support.”
Id., at 44; see id., at 45 (quoting passage from S. Rep. No. 404,
89th Cong., 1st Sess., pt. 1, p. 78 (1965), including statement
that “it is proper to expect spouses to support each other”).
1 The Secretary has delegated his rulemaking power to the Health Care
Financing Administration (HCFA), see Statement of Organization, Func-
tions, and Delegations of Authority for the Dept. of Health and Human
Services, Pt. F, 46 Fed. Reg. 13262–13263 (1981), now called the Centers
for Medicare and Medicaid Services, see 66 Fed. Reg. 35437 (2001). We
nevertheless refer throughout this opinion to the Secretary as the entity
charged with interpretive authority.

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v. BLUMER
Opinion of the Court
Similarly, assets held jointly by the couple were commonly
deemed “available” in full to the institutionalized spouse.
At the same time, States generally did not treat resources
held individually by the community spouse as available to the
institutionalized spouse. Accordingly, assets titled solely
in the name of the community spouse often escaped consid-
eration in determining the institutionalized spouse’s Medic-
aid eligibility. See H. R. Rep. No. 100–105, pt. 2, pp. 66–67
(1987).
As Congress later found when it enacted the MCCA in
1988, these existing practices for determining a married ap-
plicant’s income and resources produced unintended conse-
quences. Many community spouses were left destitute by
the drain on the couple’s assets necessary to qualify the in-
stitutionalized spouse for Medicaid and by the diminution
of the couple’s income posteligibility to reduce the amount
payable by Medicaid for institutional care. See id., at 66–68.
Conversely, couples with ample means could qualify for as-
sistance when their assets were held solely in the community
spouse’s name.
In the MCCA, Congress sought to protect community
spouses from “pauperization” while preventing financially
secure couples from obtaining Medicaid assistance. See id.,
at 65 (bill seeks to “end th[e] pauperization” of the com-
munity spouse “by assuring that the community spouse has
a sufficient—but not excessive—amount of income and re-
sources available”). To achieve this aim, Congress installed
a set of intricate and interlocking requirements with which
States must comply in allocating a couple’s income and
resources.
Income allocation is governed by §§ 1396r–5(b) and (d).
Covering any month in which “an institutionalized spouse
is in the institution,” § 1396r–5(b)(1) provides that “no in-
come of the community spouse shall be deemed available
to the institutionalized spouse.” The community spouse’s
income is thus preserved for that spouse and does not affect

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Opinion of the Court
the determination whether the institutionalized spouse qual-
ifies for Medicaid. In general, such income is also disre-
garded in calculating the amount Medicaid will pay for the
institutionalized spouse’s care after eligibility is established.
Other provisions specifically address income allocation in
the period after the institutionalized spouse becomes Med-
icaid eligible. Section 1396r–5(b)(2)(A) prescribes, as a main
rule, that if payment of income is made solely in the name
of one spouse, that income is treated as available only to
the named spouse (the “name-on-the-check” rule). Section
1396r–5(d) provides a number of exceptions to that main
rule designed to ensure that the community spouse and other
dependents have income sufficient to meet basic needs.
Among the exceptions, § 1396r–5(d)(3) establishes for the
community spouse a “minimum monthly maintenance needs
allowance,” or MMMNA. The MMMNA is calculated by
multiplying the federal poverty level for a couple by a per-
centage set by the State. Since 1992, that percentage must
be at least 150%, §§ 1396r–5(d)(3)(A)–(B), but the resulting
MMMNA may not exceed $1,500 per month in 1988 dollars
($2,175 in 2001 dollars), §§ 1396r–5(d)(3)(C), (g).2
If the income of the community spouse determined under
§ 1396r–5(b)(2), which states the “name-on-the-check” rule,
is insufficient to yield income equal to or above the MMMNA,
§ 1396r–5(d)(1)(B) comes into play. Under that provision,
the amount of the shortfall is “deducted” from the income
of the institutionalized spouse—reducing the amount of in-
come that would otherwise be considered available for the
institutionalized spouse’s care—so long as that income is
actually made available to the community spouse. The
2 The State must also provide for an “excess shelter allowance” if nec-
essary to cover, inter alia, unusually high rent or mortgage payments.
§§ 1396r–5(d)(3)(A)(ii), (d)(4). Either spouse may request a hearing to
seek a higher MMMNA for the community spouse; such an increase will
be allowed if the couple establishes “exceptional circumstances resulting
in significant financial duress.” § 1396r–5(e)(2)(B).

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v. BLUMER
Opinion of the Court
amount thus reallocated from the institutionalized spouse
to the community spouse is called the “community spouse
monthly income allowance,” or CSMIA, § 1396r–5(d)(1)(B).
The provision for this allowance ensures that income trans-
ferred from the institutionalized spouse to the community
spouse to meet the latter’s basic needs is not also considered
available for the former’s care. As a result, Medicaid will
pay a greater portion of the institutionalized spouse’s medi-
cal expenses than it would absent the CSMIA provision.
Resource allocation is controlled by §§ 1396r–5(c) and (f).3
For purposes of establishing the institutionalized spouse’s
Medicaid eligibility,4 a portion of the couple’s assets is re-
served for the benefit of the community spouse. § 1396r–
5(c)(2). To determine that reserved amount (the CSRA),
the total of all of the couple’s resources (whether owned
jointly or separately) is calculated as of the time the in-
stitutionalized spouse’s institutionalization commenced; half
of that total is then allocated to each spouse (the “spousal
share”). § 1396r–5(c)(1)(A). The spousal share allocated to
the community spouse qualifies as the CSRA, subject to a
ceiling of $60,000 indexed for inflation (in 2001, the ceil-
ing was $87,000) and a floor, set by the State, between
$12,000 and $60,000 (also indexed for inflation; in 2001, the
amounts were $17,400 and $87,000). §§ 1396r–5(c)(2)(B),
(f)(2)(A), (g).5 The CSRA is considered unavailable to the
3 The Act excludes from the definition of “resources” the couple’s home,
one automobile, personal belongings, and certain other forms of property.
§§ 1382b(a) (1994 ed. and Supp. V), 1396r–5(c)(5) (1994 ed.).
4 Once the institutionalized spouse is determined to be eligible, “no re-
sources [gained by] the community spouse shall be deemed available to
the institutionalized spouse.” § 1396r–5(c)(4).
5 As the United States points out, Brief for United States as Amicus
Curiae 8, n. 4, the MCCA technically defines the CSRA as only a portion
of the assets protected for the benefit of the community spouse. Under
§ 1396r–5(f)(2), the CSRA denotes the amount by which the community
spouse’s “spousal share” of the couple’s resources falls below the resource
allowance set by the State pursuant to § 1396r–5(f)(2)(A). Assets cov-

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Opinion of the Court
institutionalized spouse in the eligibility determination, but
all resources above the CSRA (excluding a small sum set
aside as a personal allowance for the institutionalized spouse,
currently $2,000, see 20 CFR § 416.1205 (2001)) must be spent
before eligibility can be achieved. § 1396r–5(c)(2).
The MCCA provides for a “fair hearing” mechanism
through which a couple may challenge the State’s determina-
tion of a number of elements that affect eligibility for, or the
extent of assistance provided under, Medicaid. §§ 1396r–
5(e). The dispute in this case centers on § 1396r–5(e)(2)(C),
which allows a couple to request a higher CSRA. That sec-
tion provides in relevant part:
“If either . . . spouse establishes that the [CSRA]
(in relation to the amount of income generated by such
an allowance) is inadequate to raise the community
spouse’s income to the [MMMNA], there shall be substi-
tuted, for the [CSRA] under subsection (f)(2) of this sec-
tion, an amount adequate to provide [the MMMNA].”
If 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
ering this shortfall are automatically excluded from consideration in the
eligibility determination and transferred to the community spouse after
eligibility is achieved. §§ 1396r–5(f)(1), (2).
We observe, however, that the parties here, like the court below, refer
to the CSRA as the total resources the community spouse is permitted to
retain, an amount generally equal to the spousal share. See Brief for
Petitioner 7, n. 6; Brief for Respondent 5; 2000 WI App. 150, ¶ 10, 237 Wis.
2d 810, 816, ¶ 10, 615 N. W. 2d 647, 650, ¶ 10. The Secretary of Health
and Human Services employs the same broad definition: According to the
Secretary, the CSRA means “the amount of a couple’s combined jointly
and separately-owned resources . . . allocated to the community spouse
and considered unavailable to the institutionalized spouse when determin-
ing his or her eligibility for Medicaid.” 66 Fed. Reg. 46763, 46768 (2001).
We adhere to this common understanding of the CSRA throughout this
opinion.

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484 WISCONSIN DEPT. OF HEALTH AND FAMILY SERVS.
v. BLUMER
Opinion of the Court
available for the payment of medical expenses; accordingly,
the institutionalized spouse will become eligible for Medic-
aid sooner.
In allocating income and resources between spouses for
purposes of § 1396r–5(e)(2)(C), the States have employed two
divergent methods: an “income-first” method, used by most
States; and a “resources-first” method, preferred by the
others. The two methods differ in their construction of the
term “community spouse’s income” in subsection (e)(2)(C).
Under the income-first method, “community spouse’s in-
come” is defined to include not only the community spouse’s
actual income at the time of the § 1396r–5(e) fair hearing,
but also a potential posteligibility income transfer from the
institutionalized spouse—the CSMIA authorized by § 1396r–
5(d)(1)(B), see supra, at 481–482. Thus, only if the commu-
nity spouse’s preeligibility income plus the CSMIA will fall
below the MMMNA may the couple reserve a greater portion
of assets through an enhanced CSRA.
The resources-first method, by contrast, excludes the
CSMIA from consideration. “Community spouse’s income”
under that approach includes only income actually received
by the community spouse at the time of the § 1396r–5(e) hear-
ing, not any anticipated posteligibility income transfer from
the institutionalized spouse pursuant to § 1396r–5(d)(1)(B).
If the community spouse’s income so defined will fall below
the MMMNA, the CSRA will be raised to reserve additional
assets sufficient to generate income meeting the shortfall,
whether or not the CSMIA could also accomplish that task.
In sum, the income-first method, because it takes account
of the potential CSMIA, makes it less likely that the CSRA
will be increased; it therefore tends to require couples
to expend additional resources before the institutionalized
spouse becomes Medicaid eligible.
The Secretary of Health and Human Services has issued
several statements supporting the income-first method. Ini-
tially, the Secretary interpreted the MCCA as requiring

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state hearing officers to use that method. See HCFA, Chi-
cago Regional State Letter No. 51–93 (Dec. 1993), App. to
Pet. for Cert. 78a–83a. More recently, the Secretary has
concluded that the Act permits both income-first and “some
other reasonable interpretation of the law.” HCFA, Chi-
cago Regional State Letter No. 22–94, p. 2 (July 1994), App.
to Pet. for Cert. 89a.
The Secretary has circulated for comment a proposed
rule “allow[ing] States the threshold choice of using either
the income-first or resources-first method when determining
whether the community spouse has sufficient income to meet
minimum monthly maintenance needs.” 66 Fed. Reg. 46763,
46765 (2001). The proposed rule details the Secretary’s rea-
sons for concluding that the Act does not “clearly requir[e]
the use of either [method] to the exclusion of the other.”
Id., at 46767. Accordingly, “in view of the cooperative fed-
eralism considerations embodied in the Medicaid program,”
id., at 46765, the Secretary found it appropriate to “leave
to States the decision as to which alternative to use,” id.,
at 46767.6
B
The facts of this case illustrate the operation of the Act
and the different consequences of the income-first and
resources-first approaches. Irene Blumer was admitted to
a Wisconsin nursing home in 1994 and applied for Medicaid
assistance in 1996 through her husband Burnett. In accord
with § 1396r–5(c), the Green County Department of Human
Services (County) determined that as of Irene’s institutional-
ization in 1994, the couple’s resources amounted to $145,644.
Dividing this amount evenly between the Blumers, the
6 Comments on the proposed rule were to be submitted by November 6,
2001. As the Government related at oral argument, however, the Sec-
retary fears that comments have not reached the agency due to the dis-
ruption of the Nation’s postal system in October and November 2001.
See Tr. of Oral Arg. 16–17. It remains unclear when the Secretary will
take further action on the proposed rule. See 66 Fed. Reg. 61625 (2001).

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v. BLUMER
Opinion of the Court
County attributed $72,822 to each spouse. Burnett was allo-
cated this $72,822 share as his CSRA,7 and Irene was entitled
to reserve a personal allowance of $2,000, 20 CFR § 416.1205
(2001). Combining these sums, the County determined that
the Blumers could retain $74,822 in assets.
The County next found that, as of the date of Irene’s ap-
plication, the Blumers’ resources had been reduced from
$145,644 to $89,335. That amount exceeded by $14,513 the
couple’s resource eligibility threshold. The County accord-
ingly concluded that Irene would not be eligible for Medicaid
until the couple’s assets were spent down to the $74,822 limit.
Seeking to obtain a higher CSRA, Irene requested a hear-
ing. For purposes of the hearing, Burnett’s monthly income
amounted to $1,639, consisting of $1,015 in Social Security
benefits, $309 from an annuity, and $315 generated by the
assets protected in his CSRA.8 Irene argued that because
Burnett’s monthly income fell below the applicable MMMNA
of $1,727, the examiner was obliged to increase his CSRA,
thereby protecting additional assets capable of covering the
income shortfall.
Excluding Irene’s $2,000 personal allowance, the Blumers’
total remaining assets exceeded Burnett’s $72,822 stand-
ard CSRA, as just noted, by $14,513, an amount generating
roughly $63 in monthly income. Attributing that income
to Burnett would have raised his monthly income to $1,702,
7 Wisconsin sets the CSRA floor at $50,000. Wis. Stat. § 49.455(6)(b)1m
(1999–2001). Because Burnett’s $72,822 spousal share exceeded that
amount but fell below the federally imposed ceiling, which was then
$79,020 ($60,000 indexed for inflation to 1996), the spousal share became
his CSRA. App. to Pet. for Cert. 28a.
8 The hearing examiner incorrectly calculated Burnett’s relevant
monthly income to be $1,702, mistakenly attributing to him all of the
$378 in income generated by the full $87,355 in the couple’s remaining
available resources, rather than the $315 yielded by the $72,822 in assets
reserved in his CSRA. See id., at 25a; Tr. 8 (Apr. 29, 1997). Although
the error does not affect our decision, we use the correct figures (rounded
to the nearest dollar) for illustrative purposes.

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still $25 short of the MMMNA. Thus, had the hearing of-
ficer applied the resources-first method—addressing Bur-
nett’s income shortfall by first reserving additional assets
for his benefit—the examiner would have increased Bur-
nett’s CSRA to encompass all of the Blumers’ remaining
available resources, and Irene would have become immedi-
ately eligible for Medicaid. The remaining $25 deficit in
Burnett’s income could then have been covered posteligi-
bility by a monthly transfer of income (or CSMIA) from
Irene, who at the time of the hearing received $927 per
month in Social Security and $336 from a pension.
Wisconsin, however, has adopted the income-first rule by
statute:
“If either spouse establishes at a fair hearing that the
community spouse resource allowance determined under
sub. (6)(b) without a fair hearing does not generate
enough income to raise the community spouse’s income
to the [MMMNA] . . . , the department shall establish an
amount to be used under sub. (6)(b)3. that results in a
community spouse resource allowance that generates
enough income to raise the community spouse’s income
to the [MMMNA] . . . . Except in exceptional cases
which would result in financial duress for the community
spouse, the department may not establish an amount to
be used under sub. (6)(b)3. unless the institutionalized
spouse makes available to the community spouse the
maximum monthly income allowance permitted under
sub. (4)(b).” Wis. Stat. § 49.455(8)(d) (1999–2000) (em-
phasis added).
Applying this rule, the hearing examiner concluded that he
was without authority to increase Burnett’s CSRA: The dif-
ference between Burnett’s monthly income and the MMMNA
could be erased if, after achieving eligibility, Irene made
available to Burnett $88 per month from her own income.
This, the examiner concluded, Irene would be able to do; ac-

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v. BLUMER
Opinion of the Court
cordingly, there was no need to reserve additional assets for
Burnett, and no acceleration in Irene’s Medicaid eligibility.
The following table illustrates the differences between
the income-first and resources-first methods as applied to the
Blumers:
Analysis of the Blumers’ Income Resources
Financial Situation First First
Initial Resources Allocation:
Total Resources $145,644 $145,644
Burnett’s Share $72,822 $72,822
Irene’s Share $72,822 $72,822
Standard Amount of Resources Protected:
Burnett’s Standard CSRA $72,822 $72,822
Irene’s Personal Allowance $2,000 $2,000
Total $74,822 $74,822
Assessment of Burnett’s Income:
Pension and Social Security Income $1,324 $1,324
Income from Standard CSRA $315 $315
Total $1,639 $1,639
Wisconsin MMMNA $1,727 $1,727
Compared to Burnett’s Income –$1,639 –$1,639
Income Shortfall $88 $88
Satisfying Burnett’s Income Shortfall:
Enhanced CSRA $0 $14,513
Income from Enhanced CSRA n/a $63
Required Income Transfer from Irene (CSMIA) $88 $25
End Result:
Total Resources Protected $74,822 $89,335
The hearing examiner’s determination was affirmed by
the Circuit Court of Green County. The Wisconsin Court
of Appeals, however, reversed. Concluding that the MCCA
unambiguously mandates the resources-first method, the
Wisconsin appellate court declared that the State’s income-
first statute impermissibly conflicts with federal law. 2000
WI App. 150, 237 Wis. 2d 810, 615 N. W. 2d 647. The Wis-
consin Supreme Court denied discretionary review.

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The decision of the Wisconsin Court of Appeals, holding
the income-first method impermissible and the resources-
first method required, accords with the position adopted by
Ohio intermediate appellate courts. See, e. g., Kimnach v.
Ohio Dept. of Human Servs., 96 Ohio App. 3d 640, 647, 645
N. E. 2d 825, 829–830 (1994), appeal not allowed, 71 Ohio
St. 3d 1447, 644 N. E. 2d 409 (1995). Most courts to consider
the issue, however, including the highest courts of New York
and Massachusetts, as well as two Federal Courts of Ap-
peals, have upheld the Secretary’s view that the Act permits
the income-first method. See Cleary ex rel. Cleary v. Wald-
man, 167 F. 3d 801, 805 (CA3), cert. denied, 528 U. S. 870
(1999); Chambers v. Ohio Dept. of Human Servs., 145 F. 3d
793, 801 (CA6), cert. denied, 525 U. S. 964 (1998); Golf v.
New York State Div. of Soc. Servs., 91 N. Y. 2d 656, 662, 697
N. E. 2d 555, 558 (1998); Thomas v. Commissioner of Div.
of Medical Assistance, 425 Mass. 738, 746, 682 N. E. 2d 874,
879 (1997). We granted certiorari to resolve this conflict,
533 U. S. 927 (2001), and now reverse the judgment of the
Wisconsin Court of Appeals.
II
The question presented is whether the income-first pre-
scription of the Wisconsin statute, requiring that potential
income transfers from the institutionalized spouse be con-
sidered part of the “community spouse’s income” for pur-
poses of determining whether a higher CSRA is necessary,
conflicts with the MCCA. The answer to that question, the
parties agree, turns on whether the words “community
spouse’s income” in § 1396r–5(e)(2)(C) may be interpreted
to include potential, posteligibility transfers of income from
the institutionalized spouse permitted by § 1396r–5(d)(1)(B).
In line with the decision of the Wisconsin Court of Ap-
peals, 2000 WI App. 150, ¶ 20, but in conflict with the weight
of lower court authority, see, e. g., Cleary, 167 F. 3d, at 807;
Chambers, 145 F. 3d, at 802, Blumer first argues that the

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v. BLUMER
Opinion of the Court
plain meaning of the term “community spouse’s income” un-
ambiguously precludes the income-first method. She does
not dispute that a monthly allowance regularly transferred
from one spouse to the other could qualify as “income” under
any relevant definition, but instead focuses on the modifier
“community spouse’s,” contending that “[b]y choosing the
possessive . . . Congress clearly expressed its intent that
the income possessed by the community spouse” is the rel-
evant measure. Brief for Respondent 16. We disagree.
Congress’ use of the possessive case does not demand con-
struction of “community spouse’s income” to mean only in-
come actually possessed by, rather than available or attrib-
utable to, the community spouse; to the contrary, the use
of the possessive is often indeterminate. See J. Taylor, Pos-
sessives in English: An Exploration in Cognitive Grammar 2
(1996) (“[T]he entity denoted by a possessor nominal does
not necessarily possess (in the everyday, legalistic sense of
the term) the entity denoted by the possessee.”); see also
Smiley v. Citibank (South Dakota), N. A., 517 U. S. 735, 739
(1996) (questioning characterization of a statutory term as
unambiguous when its meaning has generated a division of
opinion in the lower courts).
Blumer maintains as well that the “design of the Act as
a whole” precludes use of the income-first method. K mart
Corp. v. Cartier, Inc., 486 U. S. 281, 291 (1988). She relies
heavily, as did the Wisconsin Court of Appeals, 2000 WI App.
150, ¶¶ 21–23, on the Act’s distinction between rules govern-
ing the initial Medicaid eligibility determination and those
that apply posteligibility to the extent-of-assistance calcula-
tion. See Brief for Respondent 17–18. Blumer notes that
the (e)(2)(C) hearing to obtain an enhanced CSRA occurs
only at the time an eligibility assessment is conducted, while
no CSMIA income is transferred until after eligibility has
been achieved, see supra, at 481–482. This sequence, she
contends, shows that Congress intended the CSRA enhance-

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ment and the CSMIA to operate at discrete stages: The
former remedies a shortfall in the income possessed by the
community spouse prior to eligibility, while the latter pro-
vides further relief posteligibility if the previous CSRA en-
hancement proves inadequate. See Brief for Respondent 18.
Because the Wisconsin statute requires imputation of the
CSMIA to the community spouse before additional assets
may be reserved, Blumer concludes, the statute reverses
the priority established by the MCCA.
In accord with the Secretary, we do not agree that Con-
gress circumscribed the (e)(2)(C) hearing in the manner
Blumer urges. Although that hearing is conducted pre-
eligibility,9 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 (e)(2)(C) hearing makes a
calculation that “concerns the post eligibility period”; ques-
tion is will “the at-home spouse . . . have sufficient income
in the post eligibility period, or does the resource allow-
ance 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. §§ 1396r–5(b)(2),
(d)(3).
In short, if the (e)(2)(C) hearing is properly comprehended
as a preeligibility projection of the couple’s posteligibility
situation, as we think it is, we do not count it unreasonable
for a State to include in its estimation of the “community
9 That the hearing must occur preeligibility is dictated by the mechanics
of the process; in order to preserve the assets, if any, that will be necessary
for the community spouse’s support in the posteligibility period, a couple
must know in advance what resources it need not and should not expend
before the institutionalized spouse becomes Medicaid eligible.

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Opinion of the Court
spouse’s income” in that posteligibility period an income
transfer that may then occur.10
Blumer’s skewed view of the (e)(2)(C) hearing also under-
lies the contention, advanced at oral argument, see Tr. of
Oral Arg. 6–10, that the income-first method renders mean-
ingless the Act’s key prohibition against deeming income
of the community spouse available to the institutionalized
one. § 1396r–5(b)(1). According to this argument, includ-
ing the CSMIA as part of the “community spouse’s income”
under subsection (e)(2)(C) effectively converts some income
of the institutionalized spouse into income of the community
spouse. And prior to eligibility, the argument continues,
all of the institutionalized spouse’s income is considered
available for medical expenses. § 1396a(a)(10)(A); 42 CFR
§ 435.120 (2000). Thus, the theory concludes, under income-
first the CSMIA would, as a logical matter, be considered
10 Taking issue with this characterization of the (e)(2)(C) hearing, the
dissent emphasizes the Wisconsin statute’s prescription that no CSRA
enhancement will be allowed “unless the institutionalized spouse makes
available to the community spouse the maximum monthly income allow-
ance permitted,” post, at 503 (quoting Wis. Stat. § 49.455(8)(d) (1993–1994))
(emphasis supplied by dissent). Only by omitting essential language from
the Wisconsin provision can the dissent construe the statute as “requir-
[ing] a preeligibility transfer of income from the institutionalized spouse
to the community spouse,” post, at 503 (emphasis added). The state stat-
ute in fact provides that the CSRA may not be enhanced “unless the insti-
tutionalized spouse makes available to the community spouse the maxi-
mum monthly income allowance permitted under sub. (4)(b).” Wis. Stat.
§ 49.455(8)(d) (emphasis added). Subsection (4)(b) is substantially identi-
cal to § 1396r–5(d)(1), the very provision of the MCCA that the dissent
finds in conflict with § 49.455(8)(d). Like § 1396r–5(d)(1), subsection (4)(b)
directs that any income transfer from the institutionalized spouse to the
community spouse may occur only “after [the] institutionalized spouse is
determined . . . to be eligible.” Wis. Stat. § 49.455(4)(b) (1999–2000). Be-
cause subsection (4)(b) of the Wisconsin statute therefore would not “per-
mit” a preeligibility income transfer from the institutionalized spouse,
§ 49.455(8)(d) by its terms does not do so either. In drawing a contrary
inference based on an incomplete reading, the dissent, not the Court, “ne-
glects to consider the text of the state statute in issue,” post, at 502.

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both “community spouse’s income” and “available” for the
institutionalized spouse’s medical expenses in clear contra-
vention of subsection (b)(1).
This argument confuses the inclusion of a projected
CSMIA in the preeligibility calculation of the community
spouse’s posteligibility income with the actual transfer of in-
come contemplated by the CSMIA provision. The (e)(2)(C)
hearing is, again, simply a projection of the state of affairs
that will exist posteligibility. The theoretical incorporation
of a CSMIA into the community spouse’s future income at
that hearing has no effect on the preeligibility allocation
of income between the spouses. A CSMIA becomes part of
the community spouse’s income only when it is in fact trans-
ferred to that spouse, § 1396r–5(d)(1)(B), which may not occur
until “[a]fter [the] institutionalized spouse is determined . . .
to be eligible.” § 1396r–5(d)(1). At that point, the actual
CSMIA is deducted from the institutionalized spouse’s in-
come, ibid., and is no longer available for medical expenses.
Thus, at all times the rule of subsection (b)(1) is honored, for
at no time is any income of the community spouse simultane-
ously deemed available to the institutionalized spouse.11
Far from precluding Wisconsin’s chosen approach, the
MCCA’s design offers affirmative support for the permis-
sibility of the income-first method. Subsection (b)(1), pro-
11 Blumer also contends that § 1396r–5(a)(3) forbids the income-first
method because that provision expressly leaves in place the existing Sup-
plemental Security Income (SSI) program rules for determining what con-
stitutes income and resources, including the standards and methods used
in such determinations. See Brief for Respondent 19–22. In particular,
Blumer emphasizes that subsection (a)(3) imposes the SSI requirement,
codified at § 1396a(r)(2)(B), that States may not adopt income-assessment
standards that reduce the number of people eligible for SSI. See id.,
at 21. As Wisconsin points out, however, the issue carved out by § 1396r–
5(a)(3)—what qualifies as income or resources—is not implicated by this
case. Reply Brief 5; see supra, at 490. At issue here is the different
question, governed entirely by the MCCA, of whether money that is indis-
putably “income” may be attributed to the community spouse.

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Opinion of the Court
hibiting attribution of the community spouse’s income to the
institutionalized spouse, has no counterpart running in the
opposite direction. Indeed, the Act specifically provides for
a transfer of income from the institutionalized spouse to the
community spouse through the CSMIA. § 1396r–5(d)(1)(B).
Mindful of the Medicaid program’s background principle that
“it is proper to expect spouses to support each other,” Gray
Panthers, 453 U. S., at 45 (quoting S. Rep. No. 404, pt. 1, at
78) (internal quotation marks omitted), we are satisfied that
a State reasonably interprets the MCCA by anticipating the
CSMIA in the (e)(2)(C) hearing.12
12 According to the dissent, anticipating the CSMIA in this manner effec-
tively “mandates an income transfer that Congress left optional,” post,
at 503–504. The dissent presumably means that the CSMIA, once pro-
jected as part of the “community spouse’s income” in the (e)(2)(C) hearing,
must in fact be transferred posteligibility lest the community spouse re-
ceive income below the statutorily guaranteed MMMNA. As this case
illustrates, however, application of the resources-first method may yield
the same situation. If the hearing examiner had granted Irene’s request
to increase Burnett’s CSRA without regard to a potential CSMIA, Bur-
nett’s income would still have fallen $25 short of the MMMNA, see supra,
at 486–487. A posteligibility income transfer in that amount would there-
fore have been “mandatory” as the dissent understands that term, post,
at 504. Thus, the dissent’s issue is not with the income-first method, but
rather with the friction between Congress’ decision to guarantee a mini-
mum level of income for the community spouse and its failure to mandate
the transfer of income necessary in many cases to realize that guarantee.
Similarly, in faulting the income-first method for the possibility that
its projections may prove inaccurate, see ibid., the dissent attacks a prob-
lem inherent in the design of the Act itself. As long as the (e)(2)(C) hear-
ing is conducted preeligibility, see supra, at 491, n. 9, the hearing examiner
must inevitably make predictions, and those predictions “may not ulti-
mately come to fruition,” post, at 504. Under the resources-first method,
just as under income-first, the examiner must decide whether to enhance
the CSRA based on speculation about the community spouse’s income in
the posteligibility period. If that income diminishes unexpectedly, the
community spouse may be left without the level of income that the exam-
iner “predicted” at the (e)(2)(C) hearing, and on the basis of which the
examiner denied a CSRA enhancement.

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We further note that subsection (e), governing fair hear-
ings in general, is not limited to a redetermination of the
CSRA. It also permits a hearing if the couple is dissatis-
fied with:
“(i) the [CSMIA];
“(ii) the amount of monthly income otherwise available
to the community spouse . . . ;
“(iii) the computation of the spousal share of resources
under subsection (c)(1) of this section; [and]
“(iv) the attribution of resources under subsection (c)(2)
of this section.” § 1396r–5(e)(2)(A).
Given that the CSMIA itself may be adjusted in a fair hear-
ing under subsection (e)(2)(A)(i), we cannot conclude that
the States are forbidden to consider the projected CSMIA
in the related hearing, authorized by subsection (e)(2)(A)(v),
to increase the CSRA. Accord, Cleary, 167 F. 3d, at 810.
III
We thus hold that the income-first method is a permissible
means of implementing the Act. The parties here have not
also disputed the permissibility of the resources-first ap-
proach. We therefore do not definitively resolve that mat-
ter, although we note that the leeway for state choices urged
by both Wisconsin and the United States is characteristic
of Medicaid.
The Medicaid statute, in which the MCCA is implanted,
is designed to advance cooperative federalism. See Harris
v. McRae, 448 U. S. 297, 308 (1980). When interpreting
other statutes so structured, we have not been reluctant
to leave a range of permissible choices to the States, at
least where the superintending federal agency has concluded
that such latitude is consistent with the statute’s aims. In
Batterton v. Francis, 432 U. S. 416, 429 (1977), for example,
we upheld a regulation promulgated by the Secretary of
Health, Education, and Welfare affording the States dis-

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Opinion of the Court
cretion in the implementation of the Aid to Families with
Dependent Children (AFDC) unemployed parent program.
The challenged regulation allowed States to cover or exclude
from coverage persons whose unemployment resulted from
participation in a labor dispute or whose conduct would dis-
qualify them for benefits under the State’s compensation law.
Noting that the AFDC program involved the “concept of
cooperative federalism,” id., at 431, we concluded that the
Secretary had the authority to “recognize some local options
in determining . . . eligibility,” id., at 430. Similarly, in
Lukhard v. Reed, 481 U. S. 368 (1987), a plurality of this
Court concluded that Virginia’s policy of treating personal
injury awards as income rather than resources under the
AFDC program was reasonable and consistent with federal
law, see id., at 377–381. The superintending federal agency,
the plurality pointed out, had for many years permitted
Virginia’s choice while allowing other States to treat such
awards as resources. Id., at 378.
The Secretary of Health and Human Services, who pos-
sesses the authority to prescribe standards relevant to the
issue here, § 1396a(a)(17),13 has preliminarily determined
that the MCCA permits both the income-first and resources-
first methods. See 66 Fed. Reg. 46763, 46767 (2001); HCFA,
Chicago Regional State Letter No. 22–94, at 2, App. to Pet.
13 Blumer argues that § 1396r–5(a)(1) divests the Secretary of the author-
ity granted under § 1396a(a)(17) to prescribe standards governing the allo-
cation of income and resources for Medicaid purposes. See Brief for Re-
spondent 39. Subsection (a)(1) states that the eligibility provisions of the
MCCA “supersede any other provision of this subchapter (including sec-
tions 1396a(a)(17) and 1396a(f) of this title) which is inconsistent with
them,” but says nothing about the regulatory authority of the Secretary
under § 1396a(a)(17). We have long noted Congress’ delegation of ex-
tremely broad regulatory authority to the Secretary in the Medicaid area,
see Schweiker v. Gray Panthers, 453 U. S. 34, 43 (1981); Batterton v. Fran-
cis, 432 U. S. 416, 425 (1977), and we will not conclude that Congress im-
plicitly withdrew that authority here.

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for Cert. 89a.14 In a recently proposed rule, the Secretary
declared that “in the spirit of Federalism,” the Federal
Government “should leave to States the decision as to which
alternative [income-first or resources-first] to use.” 66 Fed.
Reg. 46763, 46767 (2001).
The Secretary’s position warrants respectful considera-
tion. Cf. United States v. Mead Corp., 533 U. S. 218 (2001);
Thomas Jefferson Univ. v. Shalala, 512 U. S. 504, 512 (1994)
(reliance on Secretary’s “significant expertise” particularly
appropriate in the context of “a complex and highly technical
regulatory program” (internal quotation marks omitted));
Gray Panthers, 453 U. S., at 43–44 (Secretary granted “ex-
ceptionally broad authority” under the Medicaid statute).
As Blumer acknowledges, Brief for Respondent 31–32, the
MCCA affords large discretion to the States on two related
variables: the level of the MMMNA accorded the community
spouse, § 1396r–5(d)(3), see supra, at 481, and the amount of
assets the couple is permitted to retain, § 1396r–5(f)(2)(A),
see supra, at 482–483. Nothing in the Act indicates to us
that similar latitude is inappropriate with respect to the ap-
plication of subsection (e)(2)(C).
Eliminating the discretion to choose income-first would
hinder a State’s efforts to “strik[e] its own balance” in the
implementation of the Act. Lukhard, 481 U. S., at 383.
States that currently allocate limited funds through the
income-first approach would have little choice but to offset
the greater expense of the resources-first method by reduc-
ing the MMMNA or the standard CSRA. Such an alteration
would benefit couples seeking Medicaid who possess sig-
14 Contrary to the dissent’s suggestion, post, at 505, the Secretary has
never wavered from his position that the income-first method represents
at least a permissible interpretation of the Act. See HCFA, Chicago Re-
gional State Letter No. 51–93 (Dec. 1993), App. to Pet. for Cert. 78a–83a;
HCFA, Chicago Regional State Letter No. 22–94, p. 2 (July 1994), App. to
Pet. for Cert. 89a; 66 Fed. Reg. 46763, 46765 (2001).

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Stevens, J., dissenting
nificant resources—“not . . . a lot of people” by Blumer’s
own account, Tr. of Oral Arg. 38—while offering nothing to,
and perhaps disadvantaging, those who do not, couples for
whom the other variables provide the primary protection
against spousal impoverishment. Blumer would thus have
us conclude that Congress pushed States toward altering
standards that affect every person covered by the MCCA
in order to install, without any increased spending, a
resources-first rule that affects only those whose assets ex-
ceed the formula resources allowance. We perceive nothing
in the Act contradicting the Secretary’s conclusion that such
a result is unnecessary and unwarranted.
* * *
For the reasons stated, the judgment of the Wisconsin
Court of Appeals is reversed, and the case is remanded for
further proceedings not inconsistent with this opinion.
It is so ordered.
Justice Stevens, with whom Justice O’Connor and
Justice Scalia join, dissenting.
The Medicare Catastrophic Coverage Act of 1988 (MCCA),
42 U. S. C. § 1396r–5 (1994 ed. and Supp. V), provides impor-
tant protections for married couples who need financial as-
sistance when one spouse is institutionalized in a nursing
home. Eligibility for financial assistance in paying nursing
home costs is limited by a ceiling on the couple’s resources
and a ceiling on their income. The MCCA responded to
pre-1988 eligibility rules that often required both spouses to
deplete their combined resources before an institutionalized
spouse became eligible for benefits. In order to prevent the
“pauperization” of the spouse who remains at home (the
“community spouse”), the 1988 Act gives couples two impor-
tant rights that are implicated by this case. H. R. Rep.

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499 Cite as: 534 U. S. 473 (2002)
Stevens, J., dissenting
No. 100–105, pt. 2, pp. 66–67 (1987). The first is a preeligi-
bility right of the spouse who remains at home (the “commu-
nity spouse”) to retain a defined share of their joint re-
sources, called the “community spouse resource allowance”
(CSRA).1 The second is a posteligibility right of the insti-
tutionalized spouse to use a defined share of her income for
purposes other than paying for the cost of her care.
The two statutory rights involved in this case are de-
signed, in part, to assure that the community spouse’s in-
come may be maintained at a minimum level—the “mini-
mum monthly maintenance needs allowance” (MMMNA).2
To safeguard these rights and this minimum level of sub-
sistence for the community spouse, the statute provides for
a “fair hearing,” at which a couple seeking medical assistance
for an institutionalized spouse may challenge several cal-
culations that are used to determine eligibility for Medicaid.
42 U. S. C. § 1396r–5(e)(2) (1994 ed.). The determination of
the CSRA is one such calculation that may be challenged.
§ 1396r–5(e)(2)(A)(v).
During this preeligibility hearing, if the institutionalized
spouse has income-producing resources and the community
spouse’s income is below the MMMNA, the provision in issue
in this case, § 1396r–5(e)(2)(C), is applicable. By its terms,
it allows the institutionalized spouse to transfer sufficient
resources to the community spouse to provide him with an
1 A portion of the couple’s assets is allocated to the community spouse
pursuant to a formula found in 42 U. S. C. § 1396r–5(C)(1)(A) (1994 ed.).
This allocated amount, the CSRA, is reserved for the benefit of the com-
munity spouse and is not considered in establishing assistance eligibility
for the institutionalized spouse. § 1396r–5(c)(2).
2 Section 1396r–5(d)(3) sets the boundaries of the MMMNA. Although
this provision grants States some flexibility in setting the MMMNA,
it must be set no lower than 150% of the poverty level for a family of two.
In 2001, States could set the MMMNA between $1,406.25 and $2,175
per month. Wisconsin established its MMMNA at $1,935.

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Stevens, J., dissenting
income equal to the MMMNA. Since only those resources
that remain with the institutionalized spouse are counted
for eligibility purposes, § 1396r–5(e)(2)(C) enables some in-
stitutionalized spouses who would otherwise be ineligible to
qualify for financial assistance.
The text of § 1396r–5(e)(2)(C) is straightforward. As its
caption indicates, it deals only with the “[r]evision of commu-
nity spouse resource allowance” and it is applicable when an
eligibility determination is made. It provides:
“If either such spouse establishes that the community
spouse resource allowance (in relation to the amount of
income generated by such an allowance) is inadequate
to raise the community spouse’s income to the minimum
monthly maintenance needs allowance, there shall be
substituted, for the community spouse resource allow-
ance under subsection (f)(2) of this section, an amount
adequate to provide such a minimum monthly mainte-
nance needs allowance.”
Thus, under the plain language of the statute, if the CSRA
that has been calculated in accordance with § 1396r–5(c)
(1)(A) is insufficient to raise the community spouse’s in-
come to the MMMNA level, there “shall be substituted”
a new CSRA that will produce sufficient income. § 1396r–
5(e)(2)(C).
With respect to income, the sole provision in the federal
statute that authorizes a transfer of income from the in-
stitutionalized spouse to the community spouse applies only
after the eligibility determination has been made. § 1396r–
5(d)(1). It authorizes the institutionalized spouse to use
some of her income to take care of her own needs, to pro-
vide support for the community spouse when his income
is below the MMMNA, and to help other family members
before paying for her care. But as the text of the provision
expressly states, it only applies “[a]fter an institutionalized

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Stevens, J., dissenting
spouse is determined or redetermined to be eligible for medi-
cal assistance.” 3
Wisconsin has passed a statute that prohibits the resource
transfer authorized by § 1396r–5(e)(2)(C) unless the institu-
tionalized spouse first transfers any available income to the
community spouse.4 Unless this prohibition is authorized
by federal law, it is plainly invalid because it qualifies the
federal right created by § 1396r–5(e)(2)(C).
There are two possible bases for arguing that the Wis-
consin statute is consistent with § 1396r–(e)(2)(C): first, that
despite the express limitation in § 1396r–5(d) to deductions
authorized “[a]fter an institutionalized spouse is determined
or redetermined to be eligible,” Congress really meant “be-
fore or after”; and second, that when Congress used the term
“community spouse’s income” in § 1396r–5(e)(2)(C), it really
3 “Allowances to be offset from income of institutionalized spouse
“After an institutionalized spouse is determined or redetermined to be
eligible for medical assistance, in determining the amount of the spouse’s
income that is to be applied monthly to payment for the costs of care in
the institution, there shall be deducted from the spouse’s monthly income
the following amounts in the following order:
“(A) A personal needs allowance (described in section 1396a(q)(1) of this
title), in an amount not less than the amount specified in section 1396a(q)(2)
of this title.
“(B) A community spouse monthly income allowance (as defined in para-
graph (2)), but only to the extent income of the institutionalized spouse is
made available to (or for the benefit of) the community spouse.
“(C) A family allowance, for each family member. . . .” § 1396r–5(d)(1).
4 Wisconsin Stat. § 49.455(8)(d) (1993–1994) provides in part:
“Except in exceptional cases which would result in financial duress for
the community spouse, the department may not establish an amount to be
used under sub. (6)(b)3. unless the institutionalized spouse makes available
to the community spouse the maximum monthly income allowance per-
mitted under sub. (4)(b) or, if the institutionalized spouse does not have
sufficient income to make available to the community spouse the maximum
monthly income allowance permitted under sub. (4)(b), unless the in-
stitutionalized spouse makes all of his or her income . . . available to the
community spouse . . . .”

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Stevens, J., dissenting
meant “community spouse’s income plus any deduction from
the institutionalized spouse’s income that may in the future
be made available to him.” As is clear, both of these argu-
ments require altering the plain text of the statute.
Rather than admitting that its reading strains the text
of the MCCA, the Court engages in an analytical sleight of
hand: It conceives of the transfer of income that is com-
manded by the Wisconsin statute as a condition of eligibility,
not as a required transfer, but only as a prediction of things
to come. Ante, at 491–492 (“In short, if the (e)(2)(C) hearing
is properly comprehended as a preeligibility projection of the
couple’s posteligibility situation, as we think it is, we do not
count it unreasonable for a State to include in its estimation
of the ‘community spouse’s income’ in that posteligibility pe-
riod an income transfer that will then occur”). The Court’s
temporal manipulation of the § 1396r–5(e)(2)(C) hearing is in-
novative; but it is wrong for at least three reasons.
First, in speculating that Wisconsin does not actually
require a preeligibility transfer, but only predicts a future
income transfer, the Court neglects to consider the text
of the state statute in issue. In holding that Wisconsin’s
“income-first” approach is permissible, the Court states:
“The theoretical incorporation of a CSMIA [Community
Spouse Monthly Income Allowance] into the community
spouse’s future income at that hearing has no effect on the
preeligibility allocation of income between the spouses. A
CSMIA becomes part of the community spouse’s income
only when it is in fact transferred to that spouse, § 1396r–
5(d)(1)(B), which may not occur until ‘[a]fter [the] institu-
tionalized spouse is determined . . . to be eligible.’ § 1396r–
5(d)(1).” Ante, at 493 (emphasis added). The Court’s own
statement, which replaces the statutory phrase “made avail-
able to” from § 1396r–5(d)(1)(B) with the phrase “transferred
to,” exposes precisely why the Wisconsin statute is in conflict
with the MCCA. As the text of the Wisconsin statute
makes clear, there is nothing “theoretical” about the income

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Stevens, J., dissenting
transfer that it requires: “[T]he department may not [sub-
stitute an increased CSRA] unless the institutionalized
spouse makes available to the community spouse the maxi-
mum monthly income allowance permitted.” Wis. Stat.
§ 49.455(8)(d) (1999–2000) (emphasis added). The state stat-
ute requires that an institutionalized spouse “make avail-
able” income to the community spouse. In other words,
Wisconsin requires a preeligibility transfer of income from
the institutionalized spouse to the community spouse. Be-
cause 42 U. S. C. § 1396r–5(d)(1) permits the income transfer
to take place only after eligibility has been established, the
Wisconsin statue is in conflict with the plain language of
the MCCA.5
Second, although the MCCA permits an institutionalized
spouse to transfer income to the community spouse after
eligibility has been established, it by no means requires that
she do so.6 Thus, by requiring the CSMIA transfer, and
therefore not increasing the CSRA to meet the community
spouse’s income needs, the Wisconsin statute mandates an
5 The Court asserts in response that the dissent fails to consider that
the Wisconsin statute only requires the institutionalized spouse to make
available that which she is “permit[ed]” to make available pursuant to
subsection (4)(b). Ante, at 492, n. 10. But subsection (4)(b), which is sub-
stantially identical to § 1396r–5(d)(1), describes the amount of income that
can be made available posteligibility, whereas subsection (8)(d) of the Wis-
consin statute requires that it be made available as a condition of eligi-
bility. In overlooking the difference between the permissive character
of the federal provision and the mandatory character of the Wisconsin
statute, the Court’s response continues to ignore the text of the Wiscon-
sin statute.
6 Counsel for the Wisconsin Department of Health and Family Services
conceded at oral argument that the income transfer is not required. Tr. of
Oral Arg. 14 (“It doesn’t explicitly require the transfer”). The Court
itself waffles between describing the income transfer as something that
has the “potential” to occur, ante, at 489, and something that “will be,”
ante, at 491. Nevertheless, the Court’s analysis of the 42 U. S. C. § 1396r–
5(e)(2)(C) hearing clearly contemplates a mandatory posteligibility
transfer.

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v. BLUMER
Stevens, J., dissenting
income transfer that Congress left optional. Furthermore,
if the Wisconsin statute could be interpreted to require only
a prediction, rather than a mandatory preeligibility transfer,
there are several plausible reasons why such a “prediction”
may not ultimately come to fruition. For example, the in-
stitutionalized spouse might choose not to contribute to the
support of the community spouse. Alternatively, the in-
stitutionalized spouse’s income could fluctuate over time
and may not in a given month be sufficient to augment
the community spouse’s monthly income. Finally, a hear-
ing examiner’s finding of ineligibility—based on a fictional
prediction that a posteligibility transfer of income would
occur—might (as it did in this case) actually prevent the
posteligibility transfer from occurring.7 If any of these
events occurs, a primary purpose of the statute—ensuring
the financial security of the community spouse—will have
been undermined. Thus, either the Wisconsin statute man-
dates the income transfer, in which case it contradicts the
MCCA, or it diminishes the § 1396r–5(e)(2)(C) hearing into
a thought experiment that is inconsistent with the purpose
of the statute.
Third, an important posteligibility provision of the stat-
ute, which expresses the “name-on-the-check” policy of the
MCCA, also exposes why the Wisconsin statute is in con-
flict with the federal one. Section 1396r–5(b)(2)(A)(i) states:
“[Posteligibility,] if payment of income is made solely in
the name of the institutionalized spouse or the community
spouse, the income shall be considered available only to that
7 Under the hearing examiner’s ruling in this case, the predicted post-
eligibility transfer of income could not occur because he found respondent
ineligible for assistance. It is ironic, to say the least, that the predicate
for the so-called “income first” approach is a hypothetical transfer of in-
come that is actually precluded by the application of that approach. The
effect of the Wisconsin statute in this case is to preclude the reallocation of
resources that (a) is expressly authorized by § 1396r–5(e)(2)(C), (b) would
establish respondent’s eligibility, and (c) make it possible for the post-
eligibility transfer to take place.

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respective spouse.” By mandating an income transfer from
the institutionalized spouse to the community spouse, the
Wisconsin statute effectively treats the institutionalized
spouse’s income as that of the community spouse, and, there-
fore, violates the prohibition of § 1396r–5(b)(2)(A)(i).
As a final matter, the Court pays “respectful considera-
tion” to an opinion letter and policy memoranda in which
the Secretary of Health and Human Services “ ‘in the spirit
of Federalism’ ” has allowed the States to use either an
income-first or a resources-first approach. Ante, at 497.
The weight that should be accorded to such a document de-
pends “ ‘upon the thoroughness evident in its consideration,
the validity of its reasoning, its consistency with earlier and
later pronouncements, and all those factors which give it
power to persuade.’ ” United States v. Mead Corp., 533
U. S. 218, 228 (2001). The Secretary has taken inconsistent
positions on this issue over time, see App. to Pet. for Cert.
78a–90a, and the current opinion letter offers no analysis of
the potentially conflicting provisions in the federal and state
statutes. It is devoid of any “ ‘power to persuade.’ ”
The Court concludes its opinion with an explanation of
why the income-first rule may represent a better policy
choice than the resources-first rule. It is not, however, a
policy choice that Congress made. Indeed, the fact that
the text of the federal statute expressly authorizes the
resources-first approach without mentioning the income-first
rule commanded by the Wisconsin statute, at the very least,
identifies a congressional preference for the former.
This statute is not ambiguous. The resource adjustment
authorized by § 1396r–5(e)(2)(C) is not conditioned on any
prior or predicted transfer of income. The state statute im-
posing that condition is therefore invalid. Because I agree
with the analysis of the statute in the opinion of the Wiscon-
sin Court of Appeals, I would affirm its judgment. I there-
fore respectfully dissent.