How the DOMA Ruling Could Affect State Social Services Programs

With most state-run social service programs, such as Medicaid and food stamps, funded by the feds, who decides whether gay couples will receive those benefits?
by | July 31, 2013

The U.S. Supreme Court’s overturning of the federal Defense of Marriage Act, which means same-sex marriages will now be recognized by the federal government, is also going to raise issues for states and the social services programs they administer.

The White House has instructed all federal agencies to examine how the ruling will affect their programs, and states have quietly begun doing the same. They aren’t talking much about it—sources at the American Public Human Services Association, the Council of State Governments and the National Conference of State Legislatures declined to comment—but private consultants say the legwork is underway.

The elephant in the room for these conversations is that many of the most well-known state social programs, such as Medicaid and food stamps, are administered by the states but mostly funded by the feds. So who is going to decide whether same-sex couples receive those benefits?

“This ruling puts the state agencies in the position of having to administer these programs while balancing a responsibility to the federal government, but also their responsibility to the states," says David Hansell, who advises state and local governments on social services programs for KPMG, a consulting firm. “Now they have to figure out how this changes the policy environment in which they work.”

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For the 13 states where same-sex nuptials have been legalized, the answer is pretty simple: married same-sex couples will be considered married for all state and federal programs. Their incomes will be counted together when determining eligibility for Medicaid or food stamps or welfare, and they’ll receive their benefits as a household unit.

But it’s the 30-plus states that have explicitly banned same-sex marriage where the fundamental question of eligibility will be a little trickier. Neither the Justice Department nor the White House has issued any official guidance about how those states should handle the DOMA ruling. The Court’s decision ostensibly left in place another part of the law that guarantees that states where same-sex marriage is prohibited don’t have to legally acknowledge same-sex marriages from other states.

But last week, a federal judge in Ohio ruled that the state must recognize the marriage of same-sex partners who were married in Maryland so that they could be buried next to each other at a family cemetery, a right reserved to married couples. The judged relied on the same constitutional equal protection argument that Justice Anthony Kennedy presented in his decision overturning DOMA.

Gay rights advocates are expected to use the legal victory as a springboard to challenge same-sex marriage bans in other states. It is possible that some states could pass laws recognizing same-sex marriages from other states, even if they don’t take the next step of legalizing it outright; New Jersey legislators have introduced such a bill.

“We’re not going to be able to answer this question until we go through another round of litigation,” says Hansell. “In the meantime, my guess is that state agencies will feel bound by state laws and probably act according to them. Then we’ll have litigation over that until we get an answer.”

In addition to these philosophical questions, states also have to prepare for how the DOMA decision will affect their programs’ caseloads and spending.

It could cut a couple of ways. Here’s one hypothetical: A gay man’s income is low enough that, as a single person, he qualifies for Medicaid. But if he’s married and his partner makes more money than he, they might make too much as a couple to qualify for the public insurance program. That’s one less case and less expense for the state. But it could go the other way, too: A married gay woman makes too much to receive food stamps, but her partner is unemployed. Taken together as a couple, they both qualify for assistance. That’s another case and higher expense for the state. The Affordable Care Act will also be affected, as eligibility levels for expanded Medicaid or insurance subsidies change depending on a household’s size.

State actuaries are likely at work trying to determine whether the ruling puts their state more in the black or the red, but no official projections have been released.

“The decision is so recent,” Hansell says. “I’m not aware of any state that’s finished the work yet.”

Correction: As noted in the comments, unemployment insurance is determined on an individual basis. However, similiar programs such as Temporary Assistance for Needy Families (more commonly known as welfare) rely on household income.

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