Generally, in determining the Medicaid eligiblity of individuals who seek Medicaid on the basis of being 65 years old or older, or having blindness or a disability ("ABD" individuals), section 1902(r)(2)(A) of the Act requires that State Medicaid programs use the SSI program's eligibility methodologies (financial and blindness/disability-related). However, section 1902(f) of the Act permits States to use methodologies more restrictive than the SSI program's, subject to certain conditions. (These states are referred to as "209(b)" States, after the subsection 209(b) of the Social Security Act Amendments of 1972, Pub. L. No. 92-603, that enacted section 1902(f) of the Act.) 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 under their State Medicaid plans as of January 1, 1972, and must permit ABD applicants to reduce their countable income by deducting their incurred medical expenses (to "spend down") their income.

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 (in States that provide coverage to the medically needy) 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 medical expenses used to reduce the individual's income to the eligibility standard are the responsibility of the individual, i.e., to qualify for Medicaid.

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

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 eight States are SSI Criteria States.

The SSI Criteria States are:

When SSA makes a Medicaid determination

When a State requests SSA to make Medicaid eligibility determinations, the State completes a 1634 agreement with us. (See SI 01730.005 for SSA and State agreements under Section 1634.) Named for the authorizing section in the Act, the 1634 agreement specifies the State and SSA's responsibilities. Currently, the District of Columbia and the 34 States not mentioned in SI 01715.010A.1. or SI 01715.010A.2. have 1634 agreements. In these 1634 States, we make Medicaid eligibility decisions for individuals receiving SSI payments and federally-administered SSPs and who meet certain U.S. citizenship or immigration status (SI 01715.001).

When SSA does not make a Medicaid determination

SSA refers SSI claimants and recipients to the State if they may not be eligible for Medicaid coverage due to not meeting certain U.S. citizenship/immigration status requirements (SI 01715.001), but may include lawfully residing children under age 21 and/or pregnant women that are eligible for Medicaid coverage under a State's election. SSA also refers to the State those SSI claimants that do not meet the Medicaid-only factors (e.g., refusal to assign their rights to third party medical payments; refusal to provide third party liability information; or having a Medicaid trust). SSA does not determine Medicaid ineligibility; 1634 States make their own ineligibility determinations for Medicaid, and are responsible for all Medicaid ineligibility notices.

In SSI denials, we refer ineligible SSI claimants to the State.

Notification

In 1634 States, SSA tells SSI-Medicaid eligibles in the SSI award notice that they will hear from their State about Medicaid shortly. The State issues Medicaid denial notices.