title XVI payment) are covered as categorically needy, the supplementary payment meets the following standards. It is

(1) Regular, in cash and based on need;

(2) Made to some reasonable classification of aged, blind, and disabled individuals who, except for the level of their income, would be eligible for benefits under title XVI; such reasonable classifications are limited to any of the following, or any combination thereof:

(i) The aged, or the blind, or the disabled;

(ii) The aged, or the blind, or the disabled who:

(A) Are in domicilary facilities or other group-living arrangements as defined in title XVI regulations;

(B) Are receiving a supplemental payment which is administered by the Federal government in accordance with an agreement made pursuant to Section 1616(a) of the Social Security Act, provided, however, that such payment meets conditions specified in paragraph (d)(3) and (4) of this section;

(iii) Other additional classifications as may be specified by the Secretary;

(3) Available to the reasonable classifications of individuals covered on a Statewide basis, and any variations in level of payment by political subdivision are demonstrated to the satisfaction of the Secretary to be based on cost-of-living differentials; and

(4) Equal to the difference between income and the financial standard used to determine eligibility for the supplement. The income allowed under such standard, before application of any disregards applied under title XVI, may not exceed 300 percent of the supplemental security income benefit rate established by section 1611(b)(1) of the Social Security Act, except for those persons required to be covered pursuant to § 448.1(b)(2)(vi) or persons receiving a mandatory supplement under section 212 of Pub. L. 93-66.

(e) Notwithstanding the provisions specified in paragraph (d) of this section, if a State plan provides that persons who would be eligible except that they are in a medical institution (or in

termediate care facility) are covered as categorically needy, the financial standard applied to determine eligibility for such persons who are aged, blind, or disabled may not exceed that standard which will allow income, before application of any disregards applied under title XVI, of up to 300 percent of the SSI benefit rate established by section 1611(b)(1) of the Social Security Act, even though a State supplementary payment might not actually be made. The State plan must specify the financial eligibility standard for such persons.

[39 FR 9515, Mar. 11, 1974. Redesignated at 42 FR 52827, Sept. 30, 1977]

§ 448.3 State plan requirements on financial eligibility for medical assistance programs.

(a) With respect to the categorically needy, a State plan under title XIX of the Social Security Act must:

(1) Specify the financial eligibility conditions that apply to the covered categorically needy groups.

(i) In the case of families and children, the financial eligibility conditions of the State plan approved under title IV-A shall be applied.

(ii) In the case of aged, blind and disabled individuals, either:

(A) If the State plan provides for categorically needy coverage only for individuals receiving or eligible for a benefit under title XVI, the financial eligibility conditions of title XVI shall be applied;

(B) If the State plan provides for categorically needy coverage for all individuals receiving or eligible for a benefit under title XVI and in addition provides for coverage of defined classifications of persons receiving a State supplementary payment, (1) the financial eligibility conditions of title XVI shall be applied for individuals who are receiving or eligible for only a title XVI benefit and are not eligible for a State supplementary payment, and (2) the financial eligibility conditions of the State supplementary payment program shall be applied to individuals receiving such payments, provided that the financial standard for the supplementary payment program does not allow income, before application of any disregards applied under

title XVI, which exceeds 300 percent of the supplemental security income benefit rate established by section 1611(b)(1) of the Social Security Act (except that these conditions will not apply to individuals in institutions required to be covered pursuant to § 448.1(b)(2)(vi) or individuals receiving a mandatory State supplement under section 212 of Pub. L. 98-66); or (C) If the State plan limits coverage by applying any eligibility requirement as restrictive as or less restrictive than those in its January 1, 1972 medical assistance plan but more restrictive than the eligibility criteria for title XVI or supplementary payment recipients, financial eligibility criteria must be specified. These criteria may be: (1) As low as those of the January 1, 1972 medical assistance standard, or (2) up to or as high as the standards which would be allowed for title XVI beneficiaries, or for recipients of State supplementary payments as specified in paragraph (a)(1)(ii)(B) of this section.

(2) Provide for the application of income first to maintenance costs, except that this does not preclude imposition of copayments or deductibles pursuant to § 449.40 of this chapter.

(b) With respect to both the categorically needy and, if they are included in the plan, the medically needy, a State plan must:

(1) General. Provide that only such income and resources as are considered available under the provisions of this section may be considered as an applicant's or recipient's income in determining eligibility or the amount of assistance and that income and resources will be reasonably evaluated.

(i) Income and resources considered available under this secton must be counted in determining eligibility and the amount of assistance. Income and resources of spouses living together in the same household are to be considered available one to the other without proof of actual contribution. Likewise, income and resources of parents (and spouses of parents equally liable with natural parents for the support of children under a State law of general applicability or under the Supplementary Security Income Program, title XVI of the Act) are to be considered available to children under age 21

living together with them in the same household. However, parental income is not to be considered available to children age 18 or over who are not in attendance at an educational or vocational institution and whose eligibility is to be determined as blind or disabled in States basing title XIX eligibility for these groups upon title XVI (SSI) criteria.

(ii) All income and resources actually contributed to any applicant or recipient are considered in determining eligibility and the amount of assistance.

(iii) The financial responsibility (including later collection for assistance paid) of any individual for any applicant or recipient of medical assistance will be limited to the responsibility of spouse for spouse and of parents for children under age 21 (or blind or disabled).

(2) Spouses in States using SSI criteria for the aged, blind and disabled. Provide that: (i) Where both spouses apply as aged, blind or disabled or where both spouses are SSI eligible, and would cease to live together, income and resources are considered mutually available without proof of contribution for the first six months after the months they cease to live together in a common household. After that, only actually contributed income and resources may be considered in determining the eligibility or amount of assistance of either individual spouse.

(ii) Where only one spouse applies as aged, blind or disabled or is SSI eligible, and they cease to live together in a common household, only actually contributed income and resources may be considered available in determining the eligibility or amount of assistance of the applicant or recipient after the month during which they cease to live together.

(iii) For determinations of eligibility and amount of assistance of categorically needy aged, blind and disabled individuals, States shall apply the budgeting methodology and applicable dollar amounts set forth in title XVI (SSI) of the Act and 20 CFR Part 416 (with applicable variations to take account of any State Supplementary Payment Program which is federally

administered or approved pursuant to § 448.2 (d) or (e).

(iv) Such budgeting ethodology shall also apply to medically needy eligibility determinations. The income and resource levels against which countable income and resources are compared for the medically needy shall be the general statewide medically needy levels rather than the dollar amounts of the SSI (or State supplement) program. The general statewide medically needy levels shall be based on the total family size of eligible and ineligible relatives whose income or resources are or can be considered available to the assistance unit, after deducting all such relatives' incurred medical expenses.

(3) Parents of blind or disabled children in States using SSI criteria for the blind and disabled. Provided that: (i) Income and resources of parents and spouses of parents actually living together in the same household with a blind or disabled child under age 18 (or 21 if regularly attending a school, college, or university or a course of vocational or technical training designed to prepare him for gainful employment) are considered available to such child applicant or recipient without proof of actual contribution.

(ii) Income and resources of parents and spouses of parents are not considered available to a blind or disabled child not regularly sharing the common household even if the child returns to the common household for periodic visits.

(iii) Only actually contributed income and resources of parents and spouses of parents of blind or disabled applicants or recipients may be considered after the month in which the applicant or recipient ceases to live together with them in the same household.

(iv) For categorically needy determinations of blind or disabled persons under age 18 (or age 21 as provided in paragraph (b)(3)(i) of this section), States shall apply the budgeting methodology and applicable dollar amounts set forth in title XVI (SSI) of the Act and 20 CFR 416 (with applicable variations to take account of any State Supplementary Payment Program

which is federally administered or approved under § 448.2 (d) or (e).

(v) Such budgeting methodology shall also apply to medically needy determinations except that the income and resource levels against which countable income and resources are compared shall be the general statewide medically needy levels rather than the dollar amounts of the SSI (or State supplement) program. The general statewide medically needy level shall be based on the total family size of eligible and ineligible relatives whose income or reources are or can be considered available to the assistance unit after deducting all such relatives' incurred medical expenses.

(4) States which have chosen to limit medicaid coverage for the aged, blind and disabled pursuant to section 1092

of the Act. Provide that the available income and resources of spouses of aged, blind or disabled applicants or recipients, and parents and spouses of parents of blind or disabled applicants or recipients must be considered as available in a manner identical to or more extensive than the manner in which such relatives' income and resources must be considered under paragraphs (b) (2) and (3) of this section. However, such consideration of income and resources may not be more restrictive than that included in the State's January 1972 title XIX plan. Nothing in this paragraph shall be construed to mandate usage of maintenance levels lesser than or equal to those of the Supplemental Security Income (SSI) program (as set forth in title XVI of the Act and 20 CFR Part 416) where the eligibility determination is to be made under higher categorically needy or medically needy income or resource levels.

(5) Families and children (except for children eligible as blind or disabled) in all States. Provide that: (i) For individuals applying for or receiving medical assistance as AFDC-related or as needy individuals under age 21 pursuant to Section 1905 (a)(i) of the Act, the income and resources of their spouses and parents (and stepparents equally liable with natural parents for the support of children under State law of general applicability) with whom they live in the same house

hold, are considered available to such applicants or recipients without proof of actual contribution.

(ii) Even if State law of general applicability confers adult status at an age below 21, parental income is considered available to children to age 21 in family groups living together.

(iii) Except as specified in paragraphs (b) (i) and (ii) of this section, the income and resources of an AFDCrelated individual or a needy individual under age 21 eligible pursuant to Section 1905 (a)(i) of the Act shall include only such income and resources (whether from spouse, parent, or other source) as are actually contributed to him.

(iv) In medically needy determinations, the income and resource levels against which countable income and resources are compared shall be the general statewide medically needy levels rather than the dollar amounts of the AFDC program. Such medically needy levels shall be based on the total family size of eligible and ineligible relatives whose income or resources are (or can be) considered available to the assistance unit after deducting all such relatives' incurred medical expenses.

(6) Individuals establishing eligibility for Medicaid in more than one category covered in the State Plan (Title IV-A-related individuals, blind, disabled or over age 65). Provide that an individual, or his representative, shall have the right to select the category for which application is made and the income and resources of such an individual's spouse or parents (in the case of children under age 21, or blind or disabled) shall then be considered as available under the appropriate provisions of paragraphs (b) (2), (3), (4), or (5) of this section.

(7) Provide that a lower income level for maintenance shall be used for individuals not living in their own homes but receiving care in hospitals, skilled nursing facilities, intermediate care facilities, and institutions for tuberculosis or mental diseases which are covered under title XIX. This lower income level must be reasonable in amount for clothing and personal needs for such individuals, and

(i) For aged, blind, and disabled individuals, such income level must be at a minimum of $25.00 per month;

(ii) For others, States may establish reasonable standards different from that specified in paragraph (b)(7)(i) of this section provided they are based on a reasonable differential in personal needs.

When such an individual's home is maintained for a spouse or other dependents, the appropriate income level for such dependents, plus the individual's income level for maintenance in a long-term care facility, shall be applied. A higher level of maintenance may also be applied for a temporary period, not to exceed six months, to allow an individual to apply his income and resources to maintenance of a home if a physician has certified that such individual is likely to return to the home within such temporary period.

(8) Provide, for individuals in longterm care facilities specified in paragraph (b)(7) of this section, for the application of income first to personal needs, and for the medically needy only, to any title XIX enrollment fee, premium or similar charge imposed under section 1902(a)(14)(B) of the Act, and provide for the application of the remainder to the cost of medical or remedial care.

(9) Provide that, with respect to an aged, blind, or disabled individual receiving a benefit under title XVI or a State supplemental payment, who is not eligible for medical assistance unless he can meet additional eligibility criteria from the January 1972 standard, the amount of such individual's title XVI benefit and State supplemental payment will be disregarded in determining eligibility for medical assistance.

(c) With respect to the medically needy, the State plan must:

(1) Provide levels of income and resources for maintenance, in total dollar amounts, as a basis for establishing financial eligibility for medical assistance. Under this requirement:

(i) Such income levels must be comparable as among individuals and families of varying sizes;

(ii) Except as specified in paragraph (c)(1)(iii) of this section, the income

levels for maintenance must be, as a minimum, at the higher of the levels of the payment standards generally used as a measure of financial eligibility in the money payment programs, that is:

(A) In the case of families of three or more, at the level of the payment standard of the State plan approved under title IV-A generally applied;

(B) In the case of individuals, or families (including families with children) of two persons, at the higher of: (1) The payment standard of the State plan approved under title IV-A generally applied, or

(2) The highest level of payment which is generally available to individuals in any of the three groups (aged, blind and disabled) who are (or would be, except for income) eligible for benefits under title XIX;

this

paragraph

except that (c)(1)(ii)(B) shall not be construed to require the provision of medical assistance to any aged, blind or disabled individual who would not be eligible under the medical assistance standard in effect in such State for January 1972.

(iii) The income levels for maintenance may be less than those specified in paragraph (c)(1)(ii) of this section if the level for which Federal financial participation available pursuant to § 448.4(b)(4) is less, but if so, not lower than the Federal financial participation level.

(iv) Resources which may be held must, as a minimum, be at the higher of the levels allowed under the State plan approved under title IV-A or allowed in the supplemental security income program established under title XVI of the Social Security Act, and the amount of liquid assets which may be held must increase with an increase in the number of individuals in a family (except that a State may allow to aged, blind or disabled individuals only the level of resources allowed in the January 1972 medical assistance standard, if this is not less than the State allows the categorically needy). There must be separate levels established for resources.

(2) Provide that there will be a flexible measurement of available income

which will be applied in the following order of priority:

(i) First, for maintenance, so that any income in an amount at or below the established level will be protected for maintenance, except that this does not preclude imposition of any enrollment fee, premium or similar charge, or of copayments or deductibles pursuant to § 449.40 of this chapter;

(ii) Next, income will be applied to costs incurred for medical insurance premiums (including any enrollment fee premium or similar charge imposed under section 1902(a)(14)(B) of the Act), for any copayments or deductibles imposed under such section, and for necessary medical or remedial care recognized under State law and not encompassed within the State plan for medical assistance. States may set reasonable limits on such medical services for which excess income may be applied. Any medical resource of an individual in the form of insurance or other entitlement will also be applied to such costs. (See also § 450.31 of this chapter regarding third party liability);

(iii) All of the remaining excess income and medical resources in the form of insurance or other entitlement will be applied to costs of medical assistance included in the State plan. Once such income and resources are exhausted, the full amount, duration and scope of care and services provided by the plan are available.

(3) Provide that all income and resources will be considered in establishing eligibility, and for the flexible application of income to medical costs not in the plan, and for payment toward the medical assistance costs. In considering all income and resources when establishing eligibility, the State plan must provide for:

(i) In the case of families and children, consideration of all disregards applicable to income and resources which are utilized when determining eligibility, or setting aside for future needs under the State's approved title IV-A plan;

(ii) In the case of the aged, blind, or disabled, the highest of:

(A) The disregards applied in title XVI, or