Lancaster v. Cartmell.
No. 25-6000. 12/23/2025. W.D.Okla. Judge Tymkovich. Medicaid Eligibility—Spending Power Statutes—42 USC § 1396a(a)(8)—42 USC § 1983—Individually Enforceable Rights.
December 23, 2025
Max and Peggy Lancaster (the Lancasters) transferred almost $4 million worth of their real and personal property to the Lancaster Family LLC (Family LLC), which is owned by their three adult children. The Family LLC executed a loan agreement, real estate mortgages, personal guarantees, and a promissory note. The Lancasters then applied for Medicaid benefits and were denied based on ineligibility. The Lancasters sued the directors of the Oklahoma Department of Human Services and Oklahoma Health Care Authority (the agencies) under 42 USC § 1983, asserting that the agencies violated 42 USC § 1396a(a)(8) by unlawfully denying their Medicaid applications. The agencies jointly moved to dismiss the lawsuit, arguing, in part, that the Family LLC’s promissory note to the Lancasters was not legally valid under state law or made in good faith and was therefore a countable resource for determining the Lancasters’ Medicaid eligibility. The district court found that the Lancasters were not eligible for Medicaid benefits because their financial resources exceeded the asset limitation for Medicaid eligibility, and it granted the motion.
The Lancasters appealed, and while the appeal was pending, the US Supreme Court decided Medina v. Planned Parenthood South Atlantic, 606 U.S. 357 (2025), which concerned 42 USC § 1396a(a)(23)(A), the any-qualified-provider provision of the Medicaid Act. The Medicaid Act is a spending power statute requiring state compliance with federally imposed conditions. The typical remedy for state noncompliance with federally imposed conditions is action by the federal government to terminate funds to the state, not a private cause of action. In Medina, the Court explained that a statute confers a personally enforceable right only if the law clearly and unambiguously creates such right. Thus, a plaintiff must show, at a minimum, that Congress gave the states clear and unambiguous notice that they could be subject to private enforcement suits for failing to comply with federal funding conditions. Medina held that § 1396a(a)(23)(A) did not clearly and unambiguously confer an individually enforceable right under § 1983. The agencies jointly moved for summary disposition, citing Medina and arguing that Medina’s reasoning applies to § 1396a(a)(8). The Tenth Circuit determined that like § 1396a(a)(23)(A), § 1396a(a)(8) is a Medicaid provision enacted under Congress’s spending power that is materially similar to § 1396a(a)(23)(A), so Medina applies equally to the Lancasters’ claims. Accordingly, § 1396a(a)(8) does not confer an individual right enforceable by the Lancasters through § 1983.
The dismissal was affirmed.