To amend title XIX of the Social Security Act to clarify the treatment of lottery winnings and other lump sum income for purposes of income eligibility under the Medicaid program, and for other purposes.

Summary: This bill amends title XIX (Medicaid) to specify how a state must treat&nbsp;qualified lottery winnings and lump sum income for purposes of determining an individual's income-based eligibility for a state Medicaid program. Specifically, a state shall include such winnings or income as income received: (1) in the month in which it was received, if the amount is less than $60,000; (2) over a period of two months, if the amount is at least $60,000 but less than $70,000; (3) over a period of three months, if the amount is at least $70,000 but less than $80,000; and (4) over an additional one-month period for each increment of $10,000 received, not to exceed 120 months. Qualified lump sum income includes: (1) monetary winnings from gambling; (2) damages&nbsp;received&nbsp;in lump sums or periodic payments,&nbsp;excluding monthly payments, on account of causes of action other than those arising from personal physical injuries or sickness; and (3) income received as liquid assets from the estate of a deceased individual.

SECTION 1. TREATMENT OF LOTTERY WINNINGS AND OTHER LUMP-SUM INCOME FOR 
              PURPOSES OF INCOME ELIGIBILITY UNDER MEDICAID.

    (a) In General.--Section 1902 of the Social Security Act (42 U.S.C. 
1396a) is amended--
            (1) in subsection (a)(17), by striking ``(e)(14), (e)(14)'' 
        and inserting ``(e)(14), (e)(15)''; and
            (2) in subsection (e)--
                    (A) in paragraph (14) (relating to modified 
                adjusted gross income), by adding at the end the 
                following new subparagraph:
                    ``(J) Treatment of certain lottery winnings and 
                income received as a lump sum.--
                            ``(i) In general.--In the case of an 
                        individual who is the recipient of qualified 
                        lottery winnings (pursuant to lotteries 
                        occurring on or after January 1, 2018) or 
                        qualified lump sum income (received on or after 
                        such date) and whose eligibility for medical 
                        assistance is determined based on the 
                        application of modified adjusted gross income 
                        under subparagraph (A), a State shall, in 
                        determining such eligibility, include such 
                        winnings or income (as applicable) as income 
                        received--
                                    ``(I) in the month in which such 
                                winnings or income (as applicable) is 
                                received if the amount of such winnings 
                                or income is less than $60,000;
                                    ``(II) over a period of two months 
                                if the amount of such winnings or 
                                income (as applicable) is greater than 
                                or equal to $60,000 but less than 
                                $70,000;
                                    ``(III) over a period of three 
                                months if the amount of such winnings 
                                or income (as applicable) is greater 
                                than or equal to $70,000 but less than 
                                $80,000; and
                                    ``(IV) over an additional one-month 
                                period for each increment of $10,000 of 
                                such winnings or income (as applicable) 
                                received, not to exceed 120 months (for 
                                winnings or income of $1,240,000 or 
                                more), if the amount of such winnings 
                                or income is greater than or equal to 
                                $80,000.
                            ``(ii) Counting in equal installments.--For 
                        purposes of clause (i), winnings or income to 
                        which such clause applies shall be counted in 
                        equal monthly installments over the applicable 
                        period of months specified in such clause.
                            ``(iii) Qualified lottery winnings 
                        defined.--In this subparagraph, the term 
                        `qualified lottery winnings' means winnings 
                        from a sweepstakes, lottery, or pool described 
                        in paragraph (3) of section 4402 of the 
                        Internal Revenue Code of 1986 or a lottery 
                        operated by a multistate or multijurisdictional 
                        lottery association, including amounts awarded 
                        as a lump sum payment.
                            ``(iv) Qualified lump sum income defined.--
                        In this subparagraph, the term `qualified lump 
                        sum income' means income that is received as a 
                        lump sum from one of the following sources:
                                    ``(I) Monetary winnings from 
                                gambling (as defined by the Secretary 
                                and including gambling activities 
                                described in section 1955(b)(4) of 
                                title 18, United States Code).
                                    ``(II) Damages received, whether by 
                                suit or agreement and whether as lump 
                                sums or as periodic payments (other 
                                than monthly payments), on account of 
                                causes of action other than causes of 
                                action arising from personal physical 
                                injuries or physical sickness.
                                    ``(III) Income received as liquid 
                                assets from the estate (as defined in 
                                section 1917(b)(4)) of a deceased 
                                individual.''; and
                    (B) by striking ``(14) Exclusion'' and inserting 
                ``(15) Exclusion''.
    (b) Rule of Construction.--Nothing in the amendment made by 
subsection (a)(2)(A) shall be construed as preventing a State from 
intercepting the State lottery winnings awarded to an individual in the 
State to recover amounts paid by the State under the State Medicaid 
plan under title XIX of the Social Security Act for medical assistance 
furnished to the individual.