The Connecticut Department of Income Maintenance v. Heckler case in 1984 revolved around the issue of whether federal law preempted a state regulation that reduced benefits for Medicaid recipients who were also receiving Medicare benefits. The State of Connecticut had enacted regulations to reduce its payments to dual-eligible individuals, arguing that these reductions would be offset by increased federal contributions through Medicare. However, several affected residents and the U.S Department of Health and Human Services (HHS) challenged this action as violating the "reasonable standards" provision under Section 1396a(a)(17) of the Social Security Act. In a unanimous decision, the Supreme Court ruled in favor of HHS Secretary Margaret Heckler, holding that federal law did indeed preempt state regulations reducing Medicaid payments for those also eligible for Medicare. The court reasoned that such reductions could lead to inadequate medical care or deter providers from accepting dual-eligible patients due to lower reimbursement rates - outcomes contrary to Medicaid's purpose.

In the dissenting opinion for Connecticut Department of Income Maintenance v. Heckler, Justice Brennan argued that the majority's decision was a departure from established precedent regarding federal-state relations in administering joint programs. He contended that the Secretary of Health and Human Services had overstepped her authority by imposing an interpretation of Medicaid law which conflicted with Connecticut’s own reasonable understanding. The state should have been given deference to administer its program within broad federal guidelines without such interference, he asserted. Furthermore, he disagreed with the majority's view on retroactive rulemaking, stating it could lead to arbitrary government action and potential harm to states' rights if left unchecked.