The U.S. Supreme Court case Wisconsin Department of Health and Family Services v. Irene Blumer, 2001 revolved around the interpretation of Medicaid eligibility rules for couples when one spouse requires expensive institutional care while the other remains in the community. The state of Wisconsin had interpreted federal law to mean that it could count half of a couple's joint assets as belonging to the community spouse, regardless if they were actually available or not. This led to situations where spouses living in communities were denied benefits because their resources exceeded allowable limits even though those resources weren't accessible due to being used for medical expenses by their institutionalized partner. Irene Blumer challenged this interpretation after her application was rejected on these grounds following her husband's admission into a nursing home. She argued that only income and assets actually available should be considered when determining eligibility. In a unanimous decision, the Supreme Court sided with Mrs.Blumer stating that states must consider only income and resources "actually available" under Social Security Act provisions when determining Medicaid eligibility for an institutionalized individual’s spouse still living within their shared community.

In the dissenting opinion for Wisconsin Department of Health and Family Services v. Irene Blumer, Justice Stevens argued that the majority's interpretation of Medicaid law was incorrect. He contended that it unfairly penalized married couples where one spouse is institutionalized while the other remains in the community. According to him, this approach contradicts Congress' intent to prevent "spousal impoverishment" by allowing a portion of their combined resources to be allocated for the care of a non-institutionalized spouse (community spouse). In his view, states should calculate eligibility based on an individual assessment at each point in time rather than using a fixed formula as suggested by majority ruling. This would ensure fair treatment and avoid unnecessary hardship for such families who are already dealing with significant health issues.