Fleming & Curti, P.L.C. - Members of Religious Colony May Not Qualify for Medicaid

DECEMBER 12, 2005 VOLUME 13, NUMBER 24

Members of Religious Colony May Not Qualify for Medicaid

Members of the Hutterian Brethren (usually referred to as Hutterites) participate in an unusual socio-religious exercise. Believers live in colonies, and every colony member transfers all his or her worldly goods to the religious order for control by the colony’s directors, who hold all property for the communal good. So what happens when a Hutterite needs medical care?

Rita Hofer, Mary Wollman, Anna Hofer, Bertha Hofer, Sarah Hofer, Marie Hofer and Judith Hofer are all members of the King Colony Ranch, a Hutterite colony in Montana and one of 48 in the state (there are 77 others in North Dakota, South Dakota, Minnesota, Oregon and Washington, and another 344 in Canada). The seven women applied for Medicaid coverage for some of their medical care, and were found to be eligible for benefits in 1992. Then Montana authorities reconsidered, and the state’s Medicaid agency ruled that the women should look to the colony’s considerable wealth—estimated at more than $2 million, though mostly in farmland—before expecting government assistance with medical care.

The Hutterite women appealed, arguing that they were being discriminated against because of their religious beliefs. They had no real ability to reach the colony’s assets, they insisted, since all the business of the religious order is managed by a minister, and as women they do not even have the right to participate in his selection.

The Medicaid agency disagreed, and characterized the colony as akin to a trust. While each Hutterite transfers all his or her assets to the colony, reasoned the agency, the religious order in return agrees to support its individual members. That arrangement amounts to a trust, and each Hutterite would have the ability to force the colony to provide the promised support, by court action if necessary.

Although a trial judge found in favor of the Hutterites, the Montana Supreme Court agreed with the Medicaid agency’s analysis. In its written opinion, the state’s high court ruled that the Medicaid agency should determine the extent to which colony assets are "available" to its members, and what support each member has the legal right to expect from the religious order. Hofer v. Montana Dep’t of Public Health and Human Services, December 6, 2005.

State Medicaid officials were unpersuaded by the Hutterites’ claim that they can not pay the increasing costs of health care. Traditional families are forced to liquidate assets to pay for health care, Medicaid officials pointed out. If the King Colony Ranch could shield its assets members’ health care costs, the agency feared that other groups could follow suit, create communal property ownership arrangements, and make every participant eligible for Medicaid.

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