Medicaid, Windsor, and Arizona’s Definition of Marriage: Homosexual Benefits Through 2014

Posted By: Ally Von Seggern, John Webster, Blake Wilkie, Jordan Willette, Andrew Weigel, Charles Wysocki 

April 23, 2015

  image01Introduction: The Medicaid Expansion

Same-sex marriage and health care reform are two intensely controversial issues in contemporary American politics. Both issues came into the legal spotlight in Arizona with the Medicaid expansion. While the State of Arizona has the power to not recognize same-sex marriage, this blended issue creates several practical problems in the law. One of the biggest legal questions in the healthcare industry arose after the passage of the Affordable Care Act in 2010. Arizona decided to opt into the Medicaid expansion program that is facilitated through the Affordable Care Act. This expansion means that the Federal Government pays for 95% of the cost of the expanded coverage while the rest of the current Medicaid program payment, which is split between the federal and state governments, remains the same. The major question is whether Arizona, when calculating the AHCCCS benefit eligibility, must or even can consider the income or property of same-sex couples who were legally married in another state and are now domiciled in Arizona. Assuming the constitutionality of Arizona’s definition of marriage, we conclude in light of U.S. v. Windsor that Arizona has the option to acknowledge same-sex marriages for Medicaid benefit purposes, but will likely choose not to in accordance with its own laws.

In the United States, married couples gain several unique benefits unavailable to unmarried couples. The Medicaid calculation differs for married and unmarried individuals. The General Accounting Office, the office in charge of analyzing the Federal Government’s accounting operations, issued a report in 1997 that identified “1,049 federal statutory provisions classified to the United States Code in which benefits, rights, and privileges are contingent on marital status or in which marital status is a factor”. In updating its report, the GAO found that this number had risen to 1,138 as of December 31, 2003. With respect to Social Security, housing, and food stamps, the GAO found that “recognition of the marital relationship is integral to the design of the program[s].” The report noted several major program categories that were impacted by the Defense of Marriage Act (DOMA), including veterans’ benefits (such as pensions and survivor benefits); taxes on income and classification of status, estates, gifts, and property sales; and benefits due to federal employees, both civilian and military. Education loan programs and agricultural price support and loan programs also implicate spouses. The 2004 report also implicated a myriad of other programs and services provided by the Federal Government which DOMA eliminated benefits for same-sex couples.

         Medicaid eligibility is based on a complex income and property calculation conducted by the state government. In Arizona, the state government administers the Medicaid program and determines the potential recipient’s eligibility through the Arizona Health Care Cost Containment System (AHCCCS). Although Arizona determines the eligibility of a person to receive Medicaid, the state is still required to follow federal statutes and regulations because it receives funds from the Federal Government. While same-sex couples cannot legally marry in the State of Arizona, many federal programs are required to recognize marriages of other states due to the Full Faith and Credit Clause in the United States Constitution.

After the passage of DOMA, the federal government used the definition of marriage in Section 3 of the Act to cease acknowledgement of same-sex marriages and deny them associated benefits. However, the case of U.S. v. Windsor declared that Section 3 of DOMA was unconstitutional and removed the federal definition of marriage from DOMA. In 2008, Arizona passed Proposition 102 with 56% of the voters supporting it. Proposition 102 added a new section to the Arizona Constitution, under Article XXX, Section 1, which stated, “[o]nly a union of one man and one woman shall be valid or recognized as a marriage in this state.” This amendment creates a unique conflict for Arizona when determining a same-sex spouse’s eligibility for Medicaid, a federal program.

In Arizona, same-sex marriages are void and unrecognized. However, same-sex couples who are legally married are domiciled within the state. These couples have either been legally married in a previous state of domicile and have since become domiciled in Arizona, or were already domiciled in Arizona and temporarily relocated to another state solely to circumvent Arizona marriage laws. Because a state does not have to recognize an evasive marriage, Arizona does not have to recognize the latter group of married couples. The first category is the subject of our analysis.

Before DOMA: The Federal History of Same-Sex Marriage

image04The question of how to recognize same-sex marriages was infrequently debated until the 1980’s. However, the Acquired Immunodeficiency Syndrome (AIDS) epidemic ignited the same-sex marriage debate by raising questions of death benefits and other benefits afforded to heterosexual couples. In the 1980’s, a spike in AIDS infections resulted in the deaths of numerous homosexual individuals. Upon death, the surviving partners of the deceased were denied benefits commonly afforded to those who lost a spouse. This issue prompted LGBT activists to raise the question of the legality of denying benefits.

Historically, the states, not the federal government, have determined the definition of marriage. The state legislatures outlined the rules for marriage, and the Federal Government had few avenues to step in due to the lack of enumerated power in this area. Moreover, numerous federal courts have declined to “step on the toes” of the states’ sovereign power to regulate domestic unions. In the 1972 case Baker v. Nelson, the Minnesota Supreme Court held that, based on the common usage of the term “marriage” and gender-specific references elsewhere in the state’s codified statute, the statutes prohibited marriage between persons of the same sex. The court reasoned that the Ninth Amendment to the United States Constitution was not binding upon the States and was distinguishable from recently decided cases affording marital privacy. The court also dismissed First and Eighth Amendment objections without discussion. The centerpiece of the court’s reasoning against a violation of the Due Process Clause, provided by the Fifth and Fourteenth Amendments, was the idea that procreation and child rearing were essential to the Constitutional protection given to marriage. None of the judges dissented.

Baker was appealed, but the U.S. Supreme Court issued a one-sentence order in response stating “[t]he appeal is dismissed for want of a substantial federal question.” Summary disposition cases such as this pose significant questions for subsequent cases. The decision of the Court is binding on lower courts. However, with decisions such as this, specific rules and guidelines narrowly define the applicability of cases decided via summary disposition. One of four general principles for applying summary judgment in future cases dictates that… “Subsequent developments by the court on the relevant doctrines may cast doubt on the continuing validity of a summary judgment.” Associate Justice Ruth Bader Ginsburg has indicated in an interview that “[t]he Supreme Court hadn’t even decided that gender-based classifications get any kind of heightened scrutiny. And the same-sex intimate conduct was considered criminal in many states in 1971, so I don’t think we can extract much in Baker v. Nelson.” This indicates that, by the fourth summary disposition principle, the Supreme Court is not forbidden from invalidating the decision in Baker.

States began to question the historical treatment of same-sex couples as homosexuality was decriminalized, the AIDS epidemic spread, and the gay liberation movement entered the public’s eye. In 1989, the New York Supreme Court ruled that two homosexual men qualified as a family for the purposes of New York City’s rent-control regulations. This ruling allowed homosexual couples to challenge rent increases as “unreasonable” in the court system. Stricter interpretations of reasonableness applied to families, as opposed to individuals living as roommates. That same year, the State Bar of California urged the recognition of same-sex marriages in California. This shifted the argument toward a concept of “fundamental fairness” for all Americans, as shown by the State Bar of California President’s speech on the matter.

The final case which sparked Congress to draft DOMA was Baehr v. Miike in 1993. In Baehr, the Supreme Court of Hawaii gave five state interests which could indicate a compelling state interest in barring same-sex marriages:

1.  Protecting the health and welfare of children and other persons.

2.  Fostering procreation within a marital setting.

3.  Securing or ensuring recognition of Hawaii marriages in other jurisdictions.

4.  Protecting the State’s public fisc from the reasonably foreseeable effects of state approval of same-sex marriage in the laws of Hawaii.

5.  Protecting civil liberties, including the reasonably foreseeable effects of state approval of same-sex marriages, on its citizens.

After a trial on the merits, the Hawaii Supreme Court determined that the State had not presented compelling evidence to bar same-sex marriage. This ruling effectively allowed same-sex couples to be married in Hawaii. This also might have required other states that had not codified a definition of marriage to recognize marriages of other states under the Full Faith and Credit Clause. The clause requires all states to recognize “public acts, records, and judicial proceedings of every other state.” As marriage has often been found to fall under this clause, other states would be required to recognize the same-sex marriages of Hawaii.

The impact of Baehr on the Federal Government came swiftly. In 1996, as Congress considered passing DOMA, the House Judiciary Committee’s Report on the legislation discussed the implications of the Baehr case at length and argued for passage because “a redefinition of marriage in Hawaii to include homosexual couples could make such couples eligible for a whole range of federal rights and benefits.” Congress specifically contemplated the impact of Hawaii’s new definition of marriage on existing laws and the benefits afforded to married couples.

In 1996, representatives submitted the Defense of Marriage Act in both houses of Congress. The purpose of DOMA was to “reflect and honor a collective moral judgment and to express moral disapproval of homosexuality”. The bill was designed to allow states to not recognize same-sex marriages despite the Full Faith and Credit Clause and amend the United States Code to expressly define marriage as a legal union between a man and a woman. The most relevant portion of DOMA was Section 3, the definition of marriage:

“In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word ‘marriage’ means only a legal union between one man and one woman as husband and wife, and the word ‘spouse’ refers only to a person of the opposite sex who is a husband or a wife.”

This effectively eliminated federal recognition of same-sex marriages. The bill was quickly passed by a Republican-dominated Congress with few Democrats offering resistance. Sitting President Bill Clinton signed DOMA into law on September 21, 1996.

Windsor: DOMA Rethought

The seminal case addressing the legitimacy of DOMA is United States v. Windsor. Edith Windsor and Thea Spyer were married in Canada in 2007. Spyer died in 2009, and left her entire estate to Windsor. Windsor wanted to use the federal estate tax exemption for surviving spouses, but was banned from doing so under Section 3 of DOMA. The section amended the Dictionary Act (providing rules of construction for over 1,000 federal laws and regulations) to define “marriage” and “spouse” to not include homosexual couples. Windsor paid $363,053 in estate taxes and asked for a refund, which the IRS turned down, claiming Windsor was not a “spouse” under DOMA interpretation. Windsor brought this suit, and argued that DOMA violates equal protection values of the 5th Amendment.

Ultimately, the Supreme Court found for Windsor, striking down Section 3 of DOMA as an unconstitutional violation of the Due Process Clause of the Fifth Amendment of the Constitution. Specifically, the Court found Section 3 to be an intrusion of the equal liberty of the people.

In its opinion, the Court resoundingly pronounced that marital relations are “an area that has long been regarded as a virtually exclusive province of the states” and federal regulation in this area is not proper. Since New York took steps to provide homosexual couples the right to marry, and the federal government created a law that injures the same class of people the state sought to protect, the Court found that the Government had overstepped the state’s sovereign authority. While the government has wide discretion in choosing means to achieve its ends, the Court found DOMA to extend further than simply implementing federal policy; it sought to target a “class of persons that the laws of New York, and of 11 other states, [had] sought to protect.” Finally, it is noted that at the time of the Constitution’s adoption, the states maintained control over marital and divorce issues, and the Constitution does not grant the government authority over marital situations.

Given the Court’s strong deference to state legislatures regarding the institution of marriage, it is likely that Arizona may, but is not required to, recognize same-sex marriage for Medicaid purposes. A history of legislative enactments evince a strong inclination toward the state not doing so.

Prop 102: Marriage in Arizona

Same-sex marriages have been invalidated in the State of Arizona since the Arizona Supreme Court annulled a same-sex marriage in 1975, ruling it (with the help of a Bible) to be unconstitutional. This immediately prompted the state legislature to pass a bill which defined marriage as between a man and a woman. Later, the 1994 gubernatorial elections in Arizona turned on the issue of same-sex marriage. Candidate Fife Symington used opponent Eddie Basha’s support of same-sex marriages to woo conservative Democrats. True to his campaign, Governor Symington signed a bill passed by the Arizona legislature proclaiming marriage between persons of the same sex void and prohibiting the recognition of same-sex marriages contracted and solemnized in other states in 1996.

In November of 2006, Arizona lawmakers moved to solidify the ban of same sex-marriages by constitutional amendment. Proposition 107 read, ”[t]o preserve and protect marriage in this state, only a union between one man and one woman shall be valid or recognized as a marriage by this state or its political subdivisions and no legal status for unmarried persons shall be created or recognized by this state or its political subdivisions that is similar to that of marriage.” The proposition not only solidified Arizona’s marriage statutes, but also discontinued the recognition of any legal status between unmarried persons (same-sex or otherwise).  Proposition 107 failed by a meager 3% margin (51/48).

image05 image02The legislation was pushed again in 2008. Proposition 102 mirrored Proposition 107 except the new proposition did not bar the acknowledgement of legal status of all unmarried persons. Proposition 102 simply defined marriage as between one man and one woman. Despite another tight race, the proposition passed 56/44. In light of neighboring California’s recent marriage cases determining the constitutionality of same-sex marriage, supporters of the proposition claimed the constitutional amendment was necessary to deter politicians or judges from overturning the state law. However, opponents of the proposition thought the amendment was a waste of money. As openly bisexual state senator Kyrsten Sinema explained, “[I]f on Nov. 5 this passes, gay marriage will be illegal in Arizona, and on Nov. 5, if this fails, gay marriage will be illegal in Arizona.” The Arizona Constitution was amended and the double-buttressed definition of marriage became solidified.

Since the passing of Proposition 102, there have been movements to legalize civil unions.  A civil partnerships ballot initiative proposed in 2009 claimed that it would provide equal access to employer backed health insurance for all partners. The claim was highly questioned given that many employers use DOMA and ERISA to exclude same-sex partners. In the wake of the civil partnership ballot initiative, the cities of Jerome, Sedona, Clarkdale, Cottonwood, Bisbee, and Tucson have passed civil union ordinances. A study in 2011 found that 72% of Arizonans support giving same sex couples the legal rights associated with marriage. 

The Constitutional Law: Points to Consider

Two constitutional quagmires are at the forefront of this issue. First, do states maintain the exclusive right to define marriage? State constitutions, including Arizona’s, convey a general police power to the state to enact legislation that is within their purview for the governing “of safety, health, welfare, and morals,” as long as the legislation does not violate the federal Constitution. The Arizona Constitution defines marriage to be as between a man and woman. As discussed above, the Supreme Court has explicitly stated that marriage is a matter of state concern, and has been since the early days of the nation. It follows that states may define marriage as they see fit for the purpose of granting entitlement program compensation.

Applying this principle to Medicaid benefits, it is likely that a state may deny benefits to homosexually married couples under their police power. If states are given the power to regulate for the “morals” of their states, it appears states have the final say regarding marital definitions. As shown by U.S. v. Windsor, the Supreme Court is very hesitant to overstep the states’ proclamations regarding marriage absent egregious discrimination. Further, as the Court has yet to require States to recognize or define same-sex marriage in the same way they treat heterosexual marriage, Arizona could ground and defend its benefit determination plan on its police power.

Next, the Fourteenth Amendment indicates that states shall “not enforce or make any law that abridge any privilege or immunity; deprive any person of life, liberty, or property without due process of the law; or deny any person equal protection of the law.” The Due Process Clause prohibits states from enacting legislation which would deny due process to an individual where they have a property interest. The Supreme Court has identified various factors which fall under the Due Process Clause. In Town of Castle Rock v. Gonzales, the Court held that a restraining order and enforcement of that order were not “property interests” as meant by the Constitution. Justice Scalia, writing for the Court, indicated that Gonzales would have needed to show, “[L]egitimate claim of entitlement” to the benefit. Further, the Court also reasoned that state law did not entitle the holder of a restraining order to any specific mandatory action by the police. Instead, restraining orders only provide grounds for arresting the subject of the order. The specific action to be taken is up to the discretion of the police. The Court stated that “[t]his is not the sort of ‘entitlement’ out of which a property interest is created.” The Court concluded that since “Colorado has not created such an entitlement,” Gonzales had no property interest and the Due Process Clause was therefore inapplicable.

Like a restraining order, Medicaid is not a “property right” as defined under the test Justice Scalia laid out in Gonzales. In determining whether a property right exists, the Court looks to whether there is a contractual agreement or monetary interest present in a given situation. The Court’s dismissal of Gonzales’s claim under 42. U.S.C. §1983 shows a general distaste for extending entitlements beyond their natural means. In the case of Medicaid, the Federal Government considers this and other programs “transfer payments” that do not give rise to a property interest. This reallocation of taxpayer dollars is not a right or privilege as protected under the Constitution.

Finally, the Fourteenth Amendment provides that equal protection of rights will be given to the citizens of each state. A deprivation of such rights to a class of individuals would constitute denial of equal protection under Section 1 of the Fourteenth Amendment. However, as an entitlement program, Medicaid is not a privilege afforded to all people and designed to discriminate against a specific group which would activate the protections of the Fourteenth Amendment. Similar to programs such as Welfare, Medicaid is federally funded and state administered program, designed to assist low-income persons and families. These programs are not open to every citizen and the benefits are only given to those who are under the threshold requirement. This necessary distinction between open programs and those already limited by statute based on age or income levels shows why the Equal Protection Clause of the 14th Amendment does not apply to protect homosexual individuals’ right to Medicaid specifically.

Reconciliation: The Confluence of Dual Federalism

image00The question of state power becomes murky with respect to federal-state programs. Must a state recognize same-sex unions for the purpose of a federally funded, but state administered, program? True, the Supreme Court’s historic decision in Windsor spawned numerous actions by the Federal Government. As stated earlier, the 2004 report from the General Accounting Office indicated 1,138 statutes or regulations impacted by the initial passage of DOMA. After section 3 of DOMA was deemed unconstitutional, the federal government was required to find new interpretations for the 1,138 statutes and regulations that were impacted.  

However, the Windsor decision also impacted the individual states and their calculations concerning Medicaid and other federally funded programs. In a letter from the Center for Medicaid and Medicare Services to the states describing the implications of the Windsor decision, noted that “while [we] believe that it is appropriate to recognize same-sex marriages that were celebrated in accordance with the laws of any state, territory, or foreign jurisdiction in which they took place, in view of the unique federal-state relationship that characterizes the Medicaid and CHIP programs, states may apply their own laws in deciding whether a couple is lawfully married.” The letter further urges, but does not require, states to acknowledge same-sex marriages for the purpose of Medicaid benefits.

Additionally, an earlier letter from the same entity outlined the method in which, after Windsor, the IRS treats marriage-related terms for tax purposes in light of the Windsor decision. It states that same-sex married couples will be treated as lawfully married for tax purposes and will be considered lawfully married so long as the marriage is valid under the laws of the jurisdiction where it was entered into, regardless of where the same-sex spouses live. To ensure efficiency, this letter also encourages states to adopt a similar approach to assessing Medicaid determinations.

These letters indicate the Federal Government’s stance on the matter. The Federal Government urging, but not requiring, the states to acknowledge same-sex marriages shows the states continue to have a choice as to the definition of marriage, even as it applies to federally funded programs.

In short, states that have taken affirmative steps to refuse recognition of same-sex unions are not required to provide the same benefits to homosexual couples as their heterosexual counterparts. Despite this, the Center for Medicaid and Medicare Services insists that same-sex marriages can be honored based on their original jurisdiction, even if it flies in the face of state law. This means Arizona indefinitely maintains the option to recognize same-sex marriages if it chooses to do so. However, through forty years of legislative precedent culminating in the enactment of Proposition 102, Arizona has declared its unequivocal objection to recognizing same-sex marriages in the near future.  Barring catastrophic consequences for not doing so, Arizona likely will not make an exception for Medicaid funding.

Beyond Windsor: The Fate of Same-Sex Marriage

Recent developments have brought the constitutionality of Proposition 102 into question. On October 17, 2014, the Arizona District Court ruled on Connolly v. Jeanes and Majors v. Horne, declaring proposition 102 and the enforcement of its provisions unconstitutional and allowing same-sex marriages within the state of Arizona. It was promptly appealed by the state, and the proposition was subsequently suspended when the Sixth Circuit Court of Appeals created a split among the federal appellate courts in Deboer v. Snyder. The fact that many couples have already married within the state presents an obstacle to all supporters of Proposition 102, especially the logistics of rescinding rights already granted.  These rulings occurred after the drafting of this issue and were not included in our analysis.

Further complications arise when accounting for Arizona’s prominent Native American community, where definitions of marriage vary drastically between tribes. The largest reservation, controlled by the Navajo Nation, passed the Diné Marriage Act in 2006, defining marriage as between a man and a woman. On the other end of the spectrum, the Hopi and White Mountain Apache Tribes acknowledge marriage in almost any form. Given historical precedent for maintaining tribal sovereignty, the tribes’ definitions of marriage will generally continue to be enforced independently of Arizona’s definition (with one major exception being the Fort McDowell Yavapai tribe, which defines marriage in accordance with state law). However, there is federal precedent for the allowance of state jurisdiction over tribal land, particularly where tax law is concerned. Forcing tribes to recognize same-sex marriages in the context of a federal program with tax-like functions could happen in some limited capacity, although it would be veering strongly outside of the States’ traditional respect for tribal culture. Given that the Navajo Nation alone encompasses over 20% of Arizona’s land area, discrepancies between tribal and state law could pose difficulties for many same-sex couples living on reservations. Many Navajo citizens are optimistic and believe the Diné act will be repealed in due time.

Distinct parallels are noted between the recognition of same-sex marriages and prior civil rights movements. Most evident is the recognition of interracial marriage, which was validated by the Supreme Court’s striking down of Virginia’s anti-miscegenation statute in 1967’s Loving v. Virginia. Such statutes against interracial sex and marriage were upheld by the Supreme Court in 1883. Of note is the Estate of Monks case regarding Arizona’s own miscegenation statute, where a man’s marriage to a woman of mixed “Caucasian and Negro” blood was annulled. The California Supreme Court ignored the wife’s argument that the statute was worded in a way that prevented her from marrying anyone. While Arizona’s marriage amendment is not as overtly paradoxical, similar issues arise with respect to the duplicitous nature of marriage as a state-defined contract, yet universally deserved right. Same-sex marriage also has a similarly long history of growing acceptance of which Windsor is a product, and will likely culminate in the Supreme Court invalidating state constitutional provisions that narrowly define marriage.

image03When such a decision happens, it may come by reason of the Full Faith and Credit Clause. Although this was never used to support interracial marriage, it has been used to enforce other judgments and contracts in relation to marriage, such as child custody and protective orders. This argument is only starting to gain inertia, with only a Kentucky District Court ruling in February of 2014 now requiring Kentucky to honor same-sex marriages from other states. To choose this route seems conservative and somewhat inelegant when compared to the complete abolition of the offending statutes in Loving. Although producing the intended effect, forcing the states to honor marriages does not address the restrictions on marriage contained in their own constitutions.  This would only indirectly force the states’ definitions of marriage to be repealed, if in fact the states could be motivated to do so. Arizona in particular has threatened to ignore federal actions it deems unconstitutional.

More likely, however, the issue of same-sex marriage will be decided by declaring definitions that deny same-sex couples’ right to marriage unconstitutional under the Fourteenth Amendment. The Supreme Court has already held that the right to marriage is “of fundamental importance for all individuals” in Zablocki v. Redhail, and that it is one of the liberties protected by this amendment. It has also held in  Romer v. Evans that governmental discrimination against “homosexual, lesbian, or bisexual orientation, conduct, practices or relationships” was a deprivation of equal protection under the law. In fact, it was the Equal Protection Clause that Loving used to support its decision. Should the Court decide to make a ruling on same-sex marriage, the five state interests used in Hawaii’s Baehr v. Miike provide a possible template to disprove any theories that allowing same-sex marriage would be a detriment to society.

The Supreme Court has several same-sex marriage cases lined up to be dealt with in summer of 2015. In the event the Court makes a decision on this reasoning, regardless of prior state law, Arizona will be forced to recognize same-sex marriages in all capacities.

Progress: Looking Forward

        Same-sex marriage and universal health care have only recently been added to America’s agenda, and will soon assume their place among the innovations that have defined our country. In truth, the evolution is ongoing, and it is almost inevitable we will see further strides to recognize increasingly fluid gender identities and the benefits of socialized health care. So go the tides of change, and Arizona–though a strong swimmer–will be swept along with them.

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Medicaid, Windsor, and Arizona’s Definition of Marriage: Homosexual Benefits Through 2014