DEPARTMENT OF HEALTH & HUMAN SERVICES 
Health Care Financing Administration  
 Center for Medicaid and State Operations 
7500 Security Boulevard 
Baltimore, MD 21244-1850 
May 2, 1997  
Dear State Medicaid Director  
IMPACT ON MEDICAID OF ONE MONTH GAP IN INITIAL SSI PAYMENT  
We are writing to provide you information about the impact on Medicaid eligibility of the change in the first month of SSI payment to 
individuals eligible for SSI. This change in law affects all SSI eligible individuals. However the change in the first month of SSI 
payment affects Medicaid eligibility only in those States where Medicaid eligibility depends on receipt of cash assistance.  
Public Law 104-193 requires that initial SSI payments generally may only begin the later of the first day of the month following the 
date the application is filed or the date the person first becomes eligible for benefits. States that have an optional or mandatory 
eligibility group under which these persons can be covered by Medicaid in the gap month, such as the optional group of persons who 
meet SSI income and resource requirements, can provide Medicaid to these individuals for the gap month in which no SSI payment is 
made, and can provide up to three months retroactive coverage for those months in the retroactive period for which the person had 
incurred medical expenses and met the eligibility requirements of the group.  
However, there are some States which do not have an eligibility group to provide Medicaid coverage to persons who are eligible for 
SSI benefits but do not receive them. Current manual guidance, implemented before welfare reform, does not allow States to provide 
retroactive coverage on the basis of a determination that the person would have met the eligibility requirements to receive SSI 
benefits. (See Section 3502.4 of the State Medicaid Manual.) As a result, the change in the date of the initial SSI payment creates a 
one month gap in Medicaid coverage in these States. In order to address this unintended consequence of welfare reform in a manner 
consistent with current law, we have developed a policy that will address Medicaid eligibility in these States.  
We are developing a State Medicaid Manual instruction to revise the existing instruction at section 3502.4 to permit States to provide 
retroactive coverage on the basis of a determination that the person would have received an SSI benefit if the person had applied in the 
retroactive months. This is of particular import in thosePage 2 -- State Medicaid Director States which do not cover individuals who 
are eligible for SSI benefits, but do not receive them. This policy will eliminate the gap in Medicaid eligibility caused by the change in 
the date of the initial SSI payment made by section 204 of welfare reform. States will be permitted to provide Medicaid eligibility in 
this situation for the month prior to the first month of SSI payment and the two preceding months if the individual meets all Medicaid 
eligibility requirements in those months. Although we have not completed the development and clearance of the new manual 
instruction, we are advising you that you may use this policy on an interim basis until the new manual instruction is issued. We will be 
issuing the new manual instruction shortly.  
This letter does not address the continuation of Medicaid coverage for legal immigrants who lose their SSI benefits. We will be 
providing additional guidance on this issue in the near future.  
If you have questions on this letter, please call Bob Tomlinson, at (410) 786-4463.  
 
Sincerely,  
 /s/   
Judith D. Moore   
Acting Director  Medicaid Bureau  
 
cc:  
All Regional Administrators  
All Associate Regional Administrators  Division of Medicaid Eligibility  
TAG Members  
Lee Partridge  American Public Welfare Association  
Joy Wilson  National Conference of State Legislators  
Jennifer Baxendell  National Governors' Association  
Lloyd Bishop  Office of Legislative and Inter-Governmental Affairs, HCFA  
Carolyn W. Colvin  Deputy Commissioner for Programs and Policy, SSA