You ask for our legal opinion regarding the SSI eligibility of residents of a proposed
public institution. Residents of Country Acres Care, a county-operated facility in
Sidney, Iowa, are currently eligible for SSI benefits (when all income and resource
requirements are met), because the facility is classified as a Publicly Operated Community
Residence (POCR), as defined in 20 C.F.R. § 416.211(c) (April 1, 1999) and section
1611(e)(1)(C) of the Social Security Act, 42 U.S.C. § 1382(e)(1)(C) (Supp. 1999).
Country Acres Care wishes to accommodate more than 16 residents. However, if a POCR
exceeds the 16-person limitation, it will be classified as a public institution, thus
precluding payment of SSI benefits to its residents.
Country Acres Care Administrator, Clifford G~, asserts that the facility may have
to close due to financial reasons unless it is able to increase the facility's size
from 16 to 24 residents because it cannot maintain appropriate services with only
16 residents. Country Acres Care serves individuals with psychiatric and mental retardation
disabilities. From July 1988 until July 1, 1999, the facility was a privately operated.
The county government is now responsible for administration and fiscal control of
the facility. In order to ensure continued SSI benefits for its residents, the county
reduced the facility to 16 or fewer beds.
Mr. G~ claims that county-operated residential care facilities, such as Country Acres
Care, which perform the same functions as private/nonprofit regimental care facilities,
are disadvantaged by the 16-resident limitation because SSA allows payment of the
full Federal Benefit Rate to private/nonprofit facilities with more than 16 residents.
Mr. G~ alleges that, if Country Acres Care has to close, its current residents will
be moved to state mental hospitals and to nursing homes with Medicaid waiver provisions
for community based placement. Mr. G~ believes that residents forced to move to state
mental hospitals will be adversely affected because their disabilities do not require
them to be institutionalized. Residents placed in local nursing homes under the Medicaid
waiver provisions will be housed with a primarily elderly population and will not
receive services tailored to their disabilities. You ask whether Mr. G~, the county,
and/or Country Acres Care residents have any way to avoid the discontinuation of the
residents' SSI benefits if the county expands to a 24-resident facility. We do not
believe that, under current law and regulations, the facility, the county, or the
residents can avoid the discontinuation of the residents' SSI benefits if the county
expands to more than 16 residents.
In 1972, Congress created the federal SSI program to provide a Federal guaranteed
minimum income level for aged, blind, and disabled persons. 42 U.S.C. §§ 1381 et seq.
(West 1992 and Supp. 1999); 20 C.F.R. § 416.110 (April 1, 1999). An SSI recipient's
income and resources must be below specified levels. 42 U.S.C. § 1382(a) (Supp. 1999).
Although the SSI program is broad, its coverage is not complete. From its inception,
the SSI program has excluded from eligibility anyone who is an "inmate in a public
institution." 42 U.S.C. § 1382(e)(1)(A). Individuals residing in an institution which
receives Medicaid benefits are eligible for a reduced amount of SSI benefits (not
exceeding $300 per year). 42 U.S.C. § 1382e(1)(B); 20 C.F.R. § 416.211(b).
In 1976, Congress created an exception to the definition of a public institution by
defining it as not including a POCR serving no more than 16 residents. 42 U.S.C. §
1382(e)(1)(C). The reason for carving out this exception to the definition of a public
institution is revealed in the legislative history of the 1976 amendments.
There has been a long-standing prohibition in public assistance statutes against payments
on behalf of persons in public institutions largely on the grounds that these programs
should not be used to subsidize State and local institutions which may be substandard
or which may represent an inappropriate type of care for the individuals involved.
There are some situations, however, in which this prohibition may work to the disadvantage
of the aged and disabled individuals whom the legislation is tended to help. This
is particularly true with regard to the mentally retarded who often can be best served
by placement in a small home or other institutional setting of a residential nature.
The committee believes that States and localities should not be discouraged from creating
and subsidizing residential facilities which may be of great benefit to many individuals
who need a place to live but do not need the kind of care which is provided in a Medicaid
institution. The bill would amend present law to provide that the prohibition against
SSI payments to persons in public institutions would not be applicable in the case
of publicly operated community residences which serve no more than 16 residents. .
. .
S. Rep. No. 94-1265, 94th Cong., 2nd Sess. 1976, 1976 U.S.C.C.A.N. 5997, 1976 WL 14058
(Legis. Hist.). Thus, the amendment was intended to encourage and benefit POCRs, such
as Country Acres Care, who do not have more than 16 residents. The legislative history
did not reveal how Congress arrived at the number 16.
Congress vested authority to promulgate rules and regulations implementing the SSI
program to the Commissioner of the Social Security Administration. 42 U.S.C. § 405(a).
Pursuant to that authority, the Commissioner promulgated a regulation defining a "public
institution," consistent with the Congressional definition, as an institution that
is operated or controlled by the Federal government, a State, or a political subdivision
of a State such as a city or a county. The term public institution does not include
a publicly operated community residence which serves 16 or fewer residents.
20 C.F.R. § 416.201; see 20 C.F.R. § 416.211(c). Thus, if a POCR, such as Country Acres Care, serves more
than 16 residents it meets the definition of a public institution and residents will
lose their SSI benefits. The Supreme Court has stated that an agency's interpretation
of its own regulations is entitled to substantial deference. The agency's interpretation
must be given controlling weight unless it is plainly erroneous or inconsistent with
the regulation. Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994). In this case, however, the 16-resident limit is required
by the statute.
Mr. G~'s argument appears to be that POCRs with more than 16 residents do not receive
equal protection compared to similar privately-operated facilities. We did not find
a case in which this issue was directly addressed. However, we did locate a number
of related cases in which plaintiffs questioned the constitutionality of the government's
definition of a public institution and/or whether the residents therein could receive
SSI benefits.
In Vinyard v. Massey, 586 F. Supp. 3 (W.D. Mo. 1984), the plaintiff, confined in a penal institution,
argued that it was unconstitutional for Congress to decline to grant SSI to an otherwise
eligible individual because he resided in a public institution which did not receive
Medicaid funds. The court held that the issue was governed by the United States Supreme
Court's decision in Schweiker v. Wilson, 450 U.S. 221 (1981), in which the Court ruled that the statute at issue distinguished
between "'residents in public institutions receiving Medicaid funds for their care
and residents in such institutions not receiving Medicaid funds.' Id. at 233-34." Employing a rational basis test, the Court determined that the statute
was constitutional and was "'rationally related to the legitimate legislative desire
to avoid spending federal resources on behalf of individuals whose care and treatment
are being fully provided for by state and local government units.' Id. at 237." Vinyard v. Massey, 586 F. Supp. at 4-5. In Wilson, the Court held that a classification judged under the rational-basis standard did
not allow the "Court to substitute its personal notions of good public policy for
those of Congress." 450 U.S. at 221-22. The Court also stated that-
[t]he equal protection obligation imposed by the Due Process Clause of the Fifth Amendment
is not an obligation to provide the best governance possible. This is a necessary
result of different institutional competences, and its reasons are obvious. Unless
a statute employs a classification that is inherently invidious or that impinges on
fundamental rights, areas in which the judiciary then has a duty to intervene in the
democratic process, this Court properly exercises only a limited review power over
Congress, the appropriate representative body through which the public makes democratic
choices among alternative solutions to social and economic problems."
450 U.S. at 230. In addition, "'the drawing of lines that create distinctions is peculiarly
a legislative task and an unavoidable one. Perfection in making the necessary classifications
is neither possible nor necessary.'" Wilson, 450 U.S. at 234, quoting Massachusetts Bd. Of Retirement v. Murgia, 427 U.S. 307, 314 (1976).
In Department of Health & Human Services v. Chater, 163 F.3d 1129 (9th Cir. 1998), the Commissioner denied applications for disability
benefits submitted by children residing in group homes for juvenile rehabilitation.
The State appealed on behalf of children who resided in privately owned and operated
group homes and publicly operated group homes serving 16 or fewer residents. The court
upheld the Commissioner's decision that the claimants were "inmates in a public institution"
and, pursuant to 42 U.S.C. § 1382(e)(1)(A), they were not eligible to receive SSI
benefits. The court also agreed that public and private group homes for juvenile rehabilitation
serving fewer than 16 residents were not POCRs whose residents would otherwise be
entitled to benefits pursuant to an exception for POCRs. Detention facilities are
excluded from the definition of POCRs. 20 C.F.R. § 416.211(c)(5)(iii).
Based upon Mr. G~'s description of Country Acres Care's beautiful setting and unique
services, we believe the facility's residents are indeed fortunate. While we recognize
the situation Country Acres Care faces, the residents will lose their SSI benefits
if the county-operated facility has more than 16 residents. Considering the cases
cited above and the legislative history of this provision, we believe a court would
find that the statute and regulations are constitutional. We see no way for the county-operated
facility to achieve a different result without legislative changes in the federal
statute. As the Court stated in Wilson, supra, the current standards "must be considered Congress' deliberate, considered
choice. The legislative record . . . appears to be unequivocal." 450 U.S. at 235.