TN 5 (05-14)

A. Policy for States and State choices

1. 209(b) States

The 209(b) States use at least one eligibility criterion more restrictive than the SSI program. States that elected this option may not use more restrictive standards than those in effect in January 1, 1972, and must provide for deducting incurred medical expenses from income through Medicaid spenddown so that individuals may reduce their income to the income eligibility level.

Medicaid spenddown is an important concept not only to the 209(b) States but also to all States with medically needy programs. Spenddown applies to individuals who have too much income to qualify under the State's income limits. When an individual has too much countable income to qualify for Medicaid, the State Medicaid agency looks at the individual's incurred medical expenses during a budget period (1 to 6 months). In some cases, the State can also look at some anticipated expenses, such as the cost of health insurance. The State then takes incurred costs for medical services covered under the State's Medicaid plan during the budget period and deducts them from the individual's countable income until the individual meets the State's income limit. The amount of the excess over the State's income limit is the responsibility of the individual, i.e., to qualify for Medicaid, the individual will have to spend down income to the State's income limit.

At present, there are 9 209(b) States. They are:  

2. SSI criteria States

States that use the SSI eligibility criteria for Medicaid, may make their own Medicaid determinations, or ask SSA to do it. States known as SSI Criteria States make their own determinations for SSI recipients. At present, the Commonwealth of the Northern Mariana Islands (NMI) and seven States are SSI Criteria States.

The SSI Criteria States are:  

3. 1634 States

When a State requests SSA to make Medicaid eligibility determinations, it completes a “1634 agreement” with us. (See SI 01730.005 for SSA and state agreements under Section 1634.) Named for the implementing provision in the Act, the 1634 agreement specifies the State and SSA's responsibilities, and requires the State to provide Medicaid coverage to recipients of federally-administered State supplementary payments (SSP’s). Currently, the District of Columbia and the 34 States not mentioned in SI 01715.010A.1. and SI 01715.010A.2. in this section have 1634 agreements, and we make Medicaid eligibility decisions about persons receiving SSI payments and federally-administered SSPs for them. These are 1634 States.

In 1634 States, SSA tells SSI-Medicaid eligibles that they will hear from their State about Medicaid in the SSI award notice shortly. In denials, we refer ineligible SSI claimants to the State. The State issues Medicaid denial notices. We also refer the records of SSI claimants who do not meet the Medicaid-only eligibility factors to the State (i.e., claimants who refuse to assign their rights to third party medical payments; those who refuse to provide third party liability information; or those who appear to have a Medicaid trust). SSA does not determine Medicaid ineligibility. The 1634 States make their own ineligibility determinations for Medicaid, and are responsible for all Medicaid ineligibility notices.

B. FO procedures for possible Medicaid eligibility

The following is an overview of SSA FO’s responsibilities:

• Complete Medicaid-only items in the SSI application and redetermination processes in 1634 States (i.e., assignment of rights, third party liability, transfer of resources, and Medicaid qualifying trust items);

• Determine the Medicaid State and county of residence (For detailed policy information see SI 01410.030);

• Refer SSI claimants to their local Medicaid and other agencies when appropriate in all States; and

• Complete Manual Medicaid Certifications when needed in 1634 States.

FO Medicaid referral responsibilities are not limited to sending SSI claimants and recipients to the Medicaid agency in 209(b) and SSI Criteria States. FO's must be sensitive to the possibility that title II beneficiaries as well as SSI recipients may be eligible for Medicaid in all States. For example, a title II beneficiary and SSI recipient can be eligible as a qualified Medicare beneficiary (QMB) in any State. In some situations, not only SSI recipients, but also some title II beneficiaries may meet the State's Medicaid eligibility requirements. FO's should refer these SSI recipients or title II beneficiaries to State Medicaid agencies as appropriate.

IMPORTANT: When requested and possible, FO's should assist State Medicaid agency personnel.

C. References

• SI 01730.040 Assignment of Rights

• SI 01730.048 Medicaid Qualifying Trusts

• SI 01730.060 State Medicaid Programs

• SI 01410.030 State of Residence for State Supplementation and Medicaid Purposes

• SI 01730.045 Third Party Liability

• SI 01730.046 Transfer of Resources