Prioritizing the Most Vulnerable Over Lottery Winners Act of 2017

Summary: Prioritizing the Most Vulnerable Over Lottery Winners Act of 2017 This bill specifies 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 $80,000; (2) over a period of two months, if the amount is at least $80,000 but less than $90,000; (3) over a period of three months, if the amount is at least $90,000 but less than $100,000; and (4) over an additional one-month period for each increment of $10,000 received, not to exceed 120 months. An individual whose income exceeds the applicable eligibility threshold due to qualified lump sum income shall continue to be eligible for medical assistance to the extent that the state determines that denial of eligibility would cause undue medical or financial hardship. With respect to an individual who loses eligibility due to qualified lump sum income, a state must provide specified notice and assistance related to the individual's potential enrollment in a qualified health plan under the Patient Protection and Affordable Care Act. 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. SHORT TITLE.

    This Act may be cited as the ``Prioritizing the Most Vulnerable 
Over Lottery Winners Act of 2017''.

SEC. 2. 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 $80,000;
                                    ``(II) over a period of 2 months if 
                                the amount of such winnings or income 
                                (as applicable) is greater than or 
                                equal to $80,000 but less than $90,000;
                                    ``(III) over a period of 3 months 
                                if the amount of such winnings or 
                                income (as applicable) is greater than 
                                or equal to $90,000 but less than 
                                $100,000; and
                                    ``(IV) over a period of 3 months 
                                plus 1 additional month for each 
                                increment of $10,000 of such winnings 
                                or income (as applicable) received, not 
                                to exceed a period of 120 months (for 
                                winnings or income of $1,260,000 or 
                                more), if the amount of such winnings 
                                or income is greater than or equal to 
                                $100,000.
                            ``(ii) Counting in equal installments.--For 
                        purposes of subclauses (II), (III), and (IV) of 
                        clause (i), winnings or income to which such 
                        subclause applies shall be counted in equal 
                        monthly installments over the period of months 
                        specified under such subclause.
                            ``(iii) Hardship exemption.--An individual 
                        whose income, by application of clause (i), 
                        exceeds the applicable eligibility threshold 
                        established by the State, shall continue to be 
                        eligible for medical assistance to the extent 
                        that the State determines, under procedures 
                        established by the State (in accordance with 
                        standards specified by the Secretary), that the 
                        denial of eligibility of the individual would 
                        cause an undue medical or financial hardship as 
                        determined on the basis of criteria established 
                        by the Secretary.
                            ``(iv) Notifications and assistance 
                        required in case of loss of eligibility.--A 
                        State shall, with respect to an individual who 
                        loses eligibility for medical assistance under 
                        the State plan (or a waiver of such plan) by 
                        reason of clause (i)--
                                    ``(I) before the date on which the 
                                individual loses such eligibility, 
                                inform the individual--
                                            ``(aa) of the individual's 
                                        opportunity to enroll in a 
                                        qualified health plan offered 
                                        through an Exchange established 
                                        under title I of the Patient 
                                        Protection and Affordable Care 
                                        Act during the special 
                                        enrollment period specified in 
                                        section 9801(f)(3) of the 
                                        Internal Revenue Code of 1986 
                                        (relating to loss of Medicaid 
                                        or CHIP coverage); and
                                            ``(bb) of the date on which 
                                        the individual would no longer 
                                        be considered ineligible by 
                                        reason of clause (i) to receive 
                                        medical assistance under the 
                                        State plan or under any waiver 
                                        of such plan and be eligible to 
                                        reapply to receive such medical 
                                        assistance; and
                                    ``(II) provide technical assistance 
                                to the individual seeking to enroll in 
                                such a qualified health plan.
                            ``(v) 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.
                            ``(vi) 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) Rules of Construction.--
            (1) Interception of lottery winnings allowed.--Nothing in 
        the amendment made by subsection (a)(2) 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 (42 U.S.C. 1396 et seq.) for medical 
        assistance furnished to the individual.
            (2) Applicability limited to eligibility of recipient of 
        lottery winnings or lump sum income.--Nothing in the amendment 
        made by subsection (a)(2)(A) shall be construed, with respect 
        to a determination of household income for purposes of a 
        determination of eligibility for medical assistance under the 
        State plan under title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.) (or a waiver of such plan) made by 
        applying modified adjusted gross income under subparagraph (A) 
        of section 1902(e)(14) of such Act (42 U.S.C. 1396a(e)(14)), as 
        limiting the eligibility for such medical assistance of any 
        individual that is a member of the household other than the 
        individual who received qualified lottery winnings or qualified 
        lump-sum income (as defined in subparagraph (J) of such section 
        1902(e)(14), as added by subsection (a)(2)(A) of this section).