• CMS Exceeds Its Authority in Doubling Down on Discrimination

    CMS has substantial discretion in how it implements the Supreme Court’s Windsor decision. The agency’s discretion is not, however, unlimited. Thus, even though Windsor doesn’t obligate CMS to force state Medicaid programs to recognize the out-of-state marriage licenses of gay couples, neither does it grant CMS the authority to nullify federal fair housing protections for Medicaid beneficiaries by accommodating the preference of states that refuse to honor the marriage licenses of gay couples. 

    CMS gets to decide whether states will have to acknowledge the validity of federally recognized marriage licenses in order to receive Medicaid funding. But by stopping short of demanding that states give equal consideration to all federally recognized marriage licenses, CMS effectively waives a wide array of congressionally mandated benefits. For example, (1) special Medicaid financial protections available only to married couples and (2) federal protections under the Fair Housing Act that are the responsibility of the Department of Housing and Urban Development. 

    HUD Secretary Shaun Donovan signed an extremely strict prohibition against discrimination in housing based on gender identity or sexual orientation, and this prohibition applies to all nursing homes that receive any sort of financial assistance from HUD. HUD’s Federal Housing Administration has an entire office devoted to a program that provides mortgage assistance to nursing homes, and about half of all nursing homes have taken advantage of this program. HUD’s anti-discrimination provision is so strict that nursing homes are prohibited from even inquiring into a resident’s gender identity or sexual orientation—so strict that there is no way a nursing home receiving assistance from HUD can lawfully determine whether any given marriage license was granted to a same-sex or opposite-sex couple. 

    By allowing states to refuse to honor the marriages of gay couples for the purpose of determining Medicaid benefits, CMS is also negatively affecting these couples’ health outcomes. Congress created special financial protections for married Medicaid beneficiaries by safeguarding a share of the couple’s jointly held assets when one spouse moves into a nursing home. Without these financial protections, spouses were often left destitute when all of their assets, including their residence, were taken to pay for a partner’s care. Since we know that poverty causes premature death, CMS’s decision to allow states to refuse to honor gay couples’ marriage licenses creates health inequities for gay couples and their families. 

    The children of gay couples are also harmed by CMS’s Windsor policy. Marriage provides legal protection for a couple’s jointly held assets. By allowing states to pick and choose which federally recognized marriage licenses to honor, CMS effectively voids the inheritance rights of people with gay parents. By curtailing the economic rights of gay families, CMS may be causing multi-generational harm. 

    The implications of CMS’s Windsor policy for gay couples were first reported by Inside Health Policy after its reporter, John Wilkerson, identified the peculiar phrase “choice-of-law rules” buried in a 75 word gobbledygook sentence as having ominous consequences for gay couples. A formal Request for Correction of CMS’s Windsor policy was filed with CMS by an industry-supported organization, the Center for Regulatory Effectiveness (CRE). CRE filed its Request using the procedures established by the Data Quality Act, a law that allows people to correct government information that contains biases and other errors. CRE’s Request for Correction explained that CMS’s policy would allow violations of beneficiaries’ federal fair housing rights. 

    CMS removed any doubt that it has established post-Windsor policy of accepting marriage inequality in federally-funded health care programs when it wrote to state Medicaid and CHIP officials and clearly stated that it was choosing to permit states to refuse to honor the marriage licenses of gay couples. CMS also explicitly stated that its Windsor policy is permitting states to deny federally-mandated financial protection for gay couples in order to “promote efficient administration of the Medicaid program.” 

    It is worth noting that Shaun Donovan has left HUD and is set to become the next Director of OMB. As Director, Mr. Donovan will have the statutory authority to supervise the Data Quality compliance review that will determine whether his equal housing legacy at HUD endures.

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