§ 435.601 Application of financial eligibility methodologies. ( a ) *Definitions.* For purposes of this section, *cash assistance financial methodologies* refers to the income and resources methodologies of the AFDC, SSI, or State supplement programs, or, for aged, blind, and disabled individuals in States that use more restrictive criteria than SSI, the methodologies established in accordance with the requirements of §§ 435.121 and 435.230.
( b ) *Basic rule for use of non-MAGI financial methodologies.* ( 1 ) This section only applies to individuals excepted from application of MAGI-based methods in accordance with § 435.603(j).
( 2 ) Except as specified in paragraphs (c) through (e) of this section or in § 435.121 or as permitted under paragraph (f)(1)(ii)(B) of this section, in determining financial eligibility of individuals as categorically or medically needy, the agency must apply the financial methodologies and requirements of the cash assistance program that is most closely categorically related to the individual's status.
( c ) *Financial responsibility of relatives.* The agency must use the requirements for financial responsibility of relatives specified in § 435.602.
( d ) *Use of less restrictive methodologies than those under cash assistance programs.* ( 1 ) At State option, and subject to the conditions of paragraphs (d)(2) through (5) of this section, the agency may apply income and resource methodologies that are less restrictive than the cash assistance methodologies or methodologies permitted under paragraph (e) or (f)(1)(ii)(B) of this section in determining eligibility for the following groups: ( i ) Qualified Medicare beneficiaries specified in sections 1902(a)(10)(E) and 1905(p) of the Act;
( ii ) Optional categorically needy individuals under groups established under subpart C of this part and section 1902(a)(10)(A)(ii) of the Act;
( iii ) Medically needy individuals under groups established under subpart D of this part and section 1902(a)(10)(C)(i)(III) of the Act; and
( iv ) Aged, blind, and disabled individuals in States using more restrictive eligibility requirements than SSI under groups established under §§ 435.121 and 435.230.
( 2 ) The income and resource methodologies that an agency elects to apply to groups of individuals described in paragraph (d)(1) of this section may be less restrictive, but no more restrictive (except in States using more restrictive requirements than SSI), than: ( i ) For groups of aged, blind, and disabled individuals, the SSI methodologies; or
( ii ) For all other groups, the methodologies under the State plan most closely categorically related to the individual's status.
( 3 ) A financial methodology is considered to be no more restrictive if, by using the methodology, additional individuals may be eligible for Medicaid and no individuals who are otherwise eligible are by use of that methodology made ineligible for Medicaid.
( 4 ) The less restrictive methodology applied under this section must be comparable for all persons within each category of assistance (aged, or blind, or disabled, or AFDC related) within an eligibility group. For example, if the agency chooses to apply less restrictive income or resource methodology to an eligibility group of aged individuals, it must apply that methodology to all aged individuals within the selected group.
( 5 ) The application of the less restrictive income and resource methodologies permitted under this section must be consistent with the limitations and conditions on FFP specified in subpart K of this part.
( e ) *Procedures for determining eligibility for the Medicare Savings Program groups.* When a State determines eligibility for a Medicare Savings Program group, for income eligibility the agency must include at least the individuals described in § 423.772 of this chapter in determining family of the size involved.
( f ) *State plan requirements.* ( 1 ) ( i ) The State plan must specify that, except to the extent precluded in § 435.602, in determining financial eligibility of individuals, the agency will apply the cash assistance financial methodologies and requirements, unless the agency chooses the option described in paragraph (f)(1)(ii)(B) of this section, or chooses to apply less restrictive income and resource methodologies in accordance with paragraph (d) of this section, or both.
( ii ) In the case of individuals for whom the program most closely categorically-related to the individual's status is AFDC (individuals under age 21, pregnant individuals and parents and other caretaker relatives who are not disabled, blind or age 65 or older), the agency may apply— ( A ) The financial methodologies and requirements of the AFDC program; or
( B ) The MAGI-based methodologies defined in § 435.603, except that, the agency must comply with the terms of § 435.602.
( 2 ) If the agency chooses to apply less restrictive income and resource methodologies, the State plan must specify: ( i ) The less restrictive methodologies that will be used; and
( ii ) The eligibility group or groups to which the less restrictive methodologies will be applied.
[58 FR 4929, Jan. 19, 1993, as amended at 59 FR 43052, Aug. 22, 1994; 81 FR 86456, Nov. 30, 2016; 88 FR 65270, Sept. 21, 2023; 89 FR 22866, Apr. 2, 2024]