Aged, Blind, and Disabled
Medicaid Eligibility Survey

OPTIONAL GROUPS

States may choose to offer Medicaid coverage to any and all of the following groups of aged, blind, and disabled persons.

Poverty Level Group

The Omnibus Budget Reconciliation Act of 1986 (OBRA 86) gave states the option to provide full Medicaid benefits to all aged and disabled persons with incomes up to 100% FPL. The resource standard for this group must be at least as high as the SSI resource standard ($2000 for one person and $3000 for a couple). States may apply §1902(r)(2) less restrictive methodologies to this group when determining how to count income and resources. Nineteen states use this option.

State Supplementary Payment Group

Many states supplement the basic SSI cash assistance with state supplementary payments (SSP) to certain SSI beneficiaries (who receive the SSI payment plus the SSP) and people with incomes too high to qualify for SSI (only receive the SSP). Financed solely with state money, these payment amounts vary widely from state to state. States can opt to make anyone receiving an SSP automatically eligible for Medicaid; at least thirty-five states have elected this option. States may also apply less restrictive methodologies to this group when determining how to count income and resources.

Medically Needy Group for Aged, Blind, and Disabled

States have the option to expand eligibility to aged, blind, and disabled persons with high medical costs, but too much income to qualify for Medicaid under any other group. These individuals “spend-down” to Medicaid eligibility levels by incurring high medical bills which reduce the individual’s income below the state-determined income eligibility limit. States may only offer medically needy coverage to the aged, blind, and disabled populations if they also offer it to pregnant women and children.

For an example of the spend-down process, assume the state’s medically needy income level is $450 per month. An elderly individual with a $650 monthly income would have a monthly “spend-down” of ($650-$450) or $200. The state has opted to use six months as the “budget period” for the program. The $200 is multiplied by the state’s budget period of 6 months for a total spend-down requirement of $1200. Once the individual has incurred medical bills totaling more than $1200, s/he is covered by the Medicaid program for the remainder of the budget period. It is an important program for individuals with chronic illnesses that dictate continuing high medical expenses.

For the medically needy group, a state sets its own medically needy income standards, not to exceed 133 and 1/3% of the state’s pre-welfare reform AFDC payment levels, with resource standards typically the same as those in the SSI program. States may apply §1902(r)(2) less restrictive methodologies to this group when determining how to count income and resources. States also set their own budget periods, and these may vary based on an individual’s living arrangement. Finally, states may opt to offer a more restrictive package of medical services for this group than applies to the categorically needy group.

Over two-thirds of the states have elected to cover aged, blind, or disabled persons under a medically needy group. In addition, the eleven 209(b) states are required to allow all aged, blind, and disabled residents to spend-down to Medicaid eligibility levels.

Institutionalized Individuals Group

Recognizing the high cost of long-term care was depleting families’ savings, Congress gave states the option to use the special income rule to provide Medicaid to persons in institutions who have too much income to qualify for SSI benefits, but not enough income to cover their expensive long-term care. Under the special income rule, also known as the 300% of SSI rule, states may set a special income standard up to 300% of the maximum SSI benefit. This applies to gross income only—that is, there are no exclusions or deductions. Resource standards are generally the same as those in the SSI program. The special income rule was originally limited to persons in institutions, but now states may elect to apply it to those receiving services under home and community-based care (HCBS) waivers, as well. Both groups—persons in institutions and persons under HCBS waivers—are required to incur a post-eligibility cost-sharing burden under this eligibility category. States that use the special income rule, but do not offer a medically needy group for aged, blind, and disabled persons must allow the use of Miller trusts—a trust designed to hold and apportion the individual’s excess income according to need and for the express purpose of becoming eligible for Medicaid, subject to Medicaid estate recovery.

States must allow nursing facility residents to keep a limited amount (at least $30) of their income as a personal needs allowance. Some states have opted to increase this amount slightly.

Each state also has spousal impoverishment protections in place to ensure that when one spouse is institutionalized for at least 30 days, the other spouse—the community spouse—does not lose all income and resources, thereby becoming impoverished and needing public assistance. The community spouse’s income is not considered available to the institutionalized spouse.

To protect resources, the couple’s resources (excluding home, household goods, one automobile, and burial funds) are combined and then halved to determine the spousal share. The spousal share is then compared to the state’s community spouse protected resource amount (CSRA). The amount actually protected for the community spouse is the greater of either the spousal share or the CSRA. By federal law, the CSRA is subject to a minimum (at and below which the entire amount is protected) and a maximum. When setting its CSRA, the state may exceed the federally prescribed minimum, but may not exceed the federal maximum.

For example, in FY 2002 the federal CSRA minimum is $17,856 and the federal CSRA maximum is $89,280. If a state uses the federal CSRA minimum, couples with combined countable resources of $50,000 would have $25,000 (half of the $50,000) protected for the community spouse. Under this same scenario, couples with countable resources of $200,000 would have $89,280 (the federal maximum) protected for the community spouse. Couples with countable resources of $15,000 (below the minimum) would have all $15,000 protected for the community spouse.

Home and Community-Based Services (HCBS) Waivers Group

States may apply for §1915(c) home and community-based care waivers that allow them to extend Medicaid eligibility to those at risk of institutionalization who wish to remain in a community setting. Under this waiver authority, a state may provide a wider range of long-term care services than is generally allowed under the state’s Medicaid program, including non-medical services such as minor home modifications like ramps or special safety devices. Often states operate several HCBS waivers targeted to various populations.

Applicants must still qualify for Medicaid under one of the Medicaid eligibility groups and must require a nursing home level of care. However, many states link financial eligibility for their HCBS waivers to a percentage of the maximum monthly SSI payment (often via the special income rule), a percentage of the federal poverty level, or their medically needy income level.

States may apply spousal impoverishment rules to HCBS waiver participants, similar to the protections guaranteed to institutionalized persons.

States may choose to allow spend-down to HCBS waiver eligibility levels. If a state uses the special income rule and does not allow spend-down to HCBS eligibility levels, it may allow Miller trusts in determining eligibility for HCBS waivers.

Because waiver participants must cover all of their living expenses themselves, states that extend the special income rule to HCBS often allow them a significant personal needs allowance. In addition, states may offer a monthly maintenance needs allowance for a spouse.

The Medicaid eligibility rules for the aged, blind, and disabled populations are probably the most complicated to administer and to explain. It is the area about which we get the most questions from state staff, researchers, and the media. We hope that this searchable database will be of help to all in threading the maze.