1342
‘‘(e) ADMINISTRATIVE ASSISTANCE.—Administrative
support for the Task Force shall be provided by the Agen-
cy for Health Care Policy and Research (or, in the absence
of such Agency, the Secretary).
‘‘PART B—ELIGIBILITY, BENEFITS, AND SET-ASIDES
‘‘SEC. 2111. GENERAL DESCRIPTION OF ELIGIBILITY AND
BENEFITS.
‘‘(a) IN GENERAL.—Each MediGrant plan shall in-
clude a description (consistent with this title) of the fol-
lowing:
‘‘(1) ELIGIBLE POPULATION.—The population
eligible for medical assistance under the plan, in-
cluding—
‘‘(A) any limitations on categories of such
individuals;
‘‘(B) any limitations as to the duration of
eligibility;
‘‘(C) any eligibility standards relating to
age, income (including any standards relating
to spenddowns), residency, resources, disability
status, immigration status, or employment sta-
tus of individuals;
‘‘(D) methods of establishing (and continu-
ing) eligibility and enrollment (including the
methodology for computing family income);
1343
‘‘(E) the eligibility standards in the plan
that protect the income and resources of a mar-
ried individual who is living in the community
and whose spouse is residing in an institution
in order to prevent the impoverishment of the
community spouse; and
‘‘(F) any other standards relating to eligi-
bility for medical assistance under the plan.
‘‘(2) SCOPE OF ASSISTANCE.—The amount, du-
ration, and scope of health care services and items
covered under the plan, including differences among
different eligible population groups.
‘‘(3) DELIVERY
METHOD.—The State’s ap-
proach to delivery of medical assistance, including a
general description of—
‘‘(A) the use (or intended use) of vouchers,
fee-for-service, or managed care arrangements
(such as capitated health care plans, case man-
agement, and case coordination), and
‘‘(B) utilization control systems.
‘‘(4) FEE-FOR-SERVICE BENEFITS.—To the ex-
tent that medical assistance is furnished on a fee-
for-service basis—
1344
‘‘(A) how the State determines the quali-
fications of health care providers eligible to pro-
vide such assistance, and
‘‘(B) how the State determines rates of re-
imbursement for providing such assistance.
‘‘(5) COST-SHARING.—Beneficiary cost-sharing
(if any), including variations in such cost-sharing by
population group or type of service and financial re-
sponsibilities of parents of recipients under 21 years
of age and the spouses of recipients.
‘‘(6) UTILIZATION INCENTIVES.—Incentives or
requirements (if any) to encourage the appropriate
utilization of services.
‘‘(7) TREATMENT OF HEALTH CENTERS.—
‘‘(A) IN GENERAL.—In the case of a State
in which one or more health centers is located,
the MediGrant plan shall include a description
of—
‘‘(i) what provision (if any) has been
made for payment for items and services
furnished by health centers, and
‘‘(ii) the manner in which medical as-
sistance for low-income eligible individuals
who received health care services at health
centers on or before the date of the enact-
1345
ment of this title may be provided, as de-
termined by the State in consultation with
the health centers in the State.
‘‘(B) HEALTH
CENTER
DEFINED.—For
purposes of subparagraph (A), the term ‘health
center’ means an entity that—
‘‘(i) is receiving a grant under section
329, 330, 340, or 340A of the Public
Health Service Act; or
‘‘(ii) based on the recommendation of
the Health Resources and Services Admin-
istration within the Public Health Service,
was determined by the Secretary to meet
the requirements to receive such a grant.
‘‘(8) SUPPORT FOR CERTAIN HOSPITALS.—
‘‘(A) IN GENERAL.—With respect to hos-
pitals described in subparagraph (B) located in
the State, the MediGrant plan shall includes a
description—
‘‘(i) of the extent to which provisions
have been made for expenditures for items
and services furnished by such hospitals
and covered under the plan, and
‘‘(ii) for individuals who (I) are en-
rolled for benefits for covered services
1346
under the MediGrant plan and (II) were
previously receiving benefits for such serv-
ices under the medicaid program by or
through such hospitals, where or how they
will receive benefits for such services under
the MediGrant plan if the MediGrant plan
does not permit such individuals to obtain
benefits for those services by or through
such hospitals.
‘‘(B) HOSPITALS
DESCRIBED.—For pur-
poses of subparagraph (A), a hospital described
in this subparagraph is a subsection (d) hos-
pital (as defined in section 1886(d)(1)(B)) that
is described in clauses (i) and (ii) of section
340B(a)(4)(L) of the Public Health Service
Act.
‘‘(b) 
IMMUNIZATIONS
FOR
CHILDREN.—The
MediGrant plan shall provide medical assistance for im-
munizations for children eligible for any medical assist-
ance under the MediGrant plan, in accordance with a
schedule for immunizations established by the Health De-
partment of the State in consultation with the individuals
and entities in the State responsible for the administration
of the plan.
1347
‘‘(c) EQUAL PAYMENT RATES FOR RURAL PROVID-
ERS.—A State with a MediGrant plan shall establish pay-
ment rates for all services of rural providers that are com-
parable to the payment rates established for like services
of such type of providers not in rural areas; except that
a State may provide for incentive payments to attract and
retain providers to medically underserved areas.
‘‘(d) PREEXISTING CONDITION EXCLUSIONS.—Not-
withstanding any other provision of this title—
‘‘(1) a MediGrant plan may not deny or exclude
coverage of any item or service for an eligible indi-
vidual for benefits under the MediGrant plan for
such item or service on the basis of a preexisting
condition; and
‘‘(2) if a State contracts or makes other ar-
rangements (through the eligible individual or
through another entity) with a capitated health care
organization, insurer, or other entity, for the provi-
sion of items or services to eligible individuals under
the MediGrant plan and the State permits such or-
ganization, insurer, or other entity to exclude cov-
erage of a covered item or service on the basis of a
preexisting condition, the State shall provide,
through its MediGrant plan, for such coverage
(through direct payment or otherwise) for any such
1348
covered item or service denied or excluded on the
basis of a preexisting condition.
‘‘(e) FAMILY RESPONSIBILITY.—A MediGrant plan
may not require an adult child of moderate means (as de-
termined by the Secretary) to contribute to the cost of
covered nursing facility services and other long-term care
services for the child’s parent under the plan.
‘‘SEC. 2112. SET-ASIDES OF FUNDS FOR POPULATION
GROUPS.
‘‘(a) FOR TARGETED LOW-INCOME FAMILIES.—
‘‘(1) IN GENERAL.—Subject to subsection (e), a
MediGrant plan shall provide that the amount of
funds expended under the plan for medical assist-
ance for targeted low-income families (as defined in
paragraph (3)) for a fiscal year shall be not less
than the minimum low-income-family percentage
specified in paragraph (2) of the total funds ex-
pended under the plan for all medical assistance for
the fiscal year.
‘‘(2) MINIMUM LOW-INCOME-FAMILY PERCENT-
AGE.—The minimum low-income-family percentage
specified in this paragraph for a State is equal to 85
percent of the average percentage of the expendi-
tures under title XIX for medical assistance in the
State during Federal fiscal years 1992 through 1994
1349
which were attributable to expenditures for medical
assistance for mandated benefits (as defined in sub-
section (h)) furnished to individuals—
‘‘(A) who (at the time of furnishing the as-
sistance) were under 65 years of age,
‘‘(B) whose coverage (at such time) under
a State plan under title XIX was required
under Federal law, and
‘‘(C) whose eligibility for such coverage (at
such time) was not on a basis directly related
to disability status (including being blind).
‘‘(3) TARGETED
LOW-INCOME
FAMILY
DE-
FINED.—In this subsection, the term ‘targeted low-
income family’ means a family (which may be an in-
dividual)—
‘‘(A) which includes a child or a pregnant
woman, and
‘‘(B) the income of which does not exceed
185 percent of the poverty line applicable to a
family of the size involved.
‘‘(b) FOR LOW-INCOME ELDERLY.—
‘‘(1) SET-ASIDES.—Subject to subsection (e)—
‘‘(A) GENERAL SET-ASIDE.—A MediGrant
plan shall provide that the amount of funds ex-
pended under the plan for medical assistance
1350
for eligible low-income individuals 65 years of
age or older for a fiscal year shall be not less
than the minimum low-income-elderly percent-
age specified in paragraph (2)(A) of the total
funds expended under the plan for all medical
assistance for the fiscal year.
‘‘(B) SET-ASIDE FOR MEDICARE PREMIUM
ASSISTANCE.—A MediGrant plan shall provide
that the amount of funds expended under the
plan for medical assistance for medicare cost-
sharing described in section 2171(c)(1) for a
fiscal year shall be not less than the minimum
medicare premium assistance percentage speci-
fied in paragraph (2)(B) of the total funds ex-
pended under the plan for all medical assistance
for the fiscal year. The MediGrant plan shall
provide priority for such making such assist-
ance available for targeted low-income elderly
individuals (as defined in paragraph (3)).
‘‘(2) MINIMUM PERCENTAGES.—
‘‘(A) FOR GENERAL SET-ASIDE.—The min-
imum low-income-elderly percentage specified in
this subparagraph for a State is equal to 85
percent of the average percentage of the ex-
penditures under title XIX for medical assist-
1351
ance in the State during Federal fiscal years
1992 through 1994 which was attributable to
expenditures for medical assistance for man-
dated benefits furnished to individuals—
‘‘(i) whose eligibility for such assist-
ance was based on their being 65 years of
age or older; and
‘‘(ii)(I) whose coverage (at such time)
under a State plan under title XIX was re-
quired under Federal law, or (II) who (at
such time) were residents of a nursing fa-
cility.
‘‘(B) FOR SET-ASIDE FOR MEDICARE PRE-
MIUM
ASSISTANCE.—The minimum medicare
premium assistance percentage specified in this
subparagraph for a State is equal to 90 percent
of the average percentage of the expenditures
under title XIX for medical assistance in the
State during Federal fiscal years 1993 through
1995 which was attributable to expenditures for
medical assistance for medicare premiums de-
scribed in section 1905(p)(3)(A) for individuals
whose coverage (at such time) for such assist-
ance for such premiums under a State plan
1352
under title XIX was required under Federal
law.
‘‘(3) TARGETED LOW-INCOME ELDERLY INDI-
VIDUAL DEFINED.—In this subsection, the term ‘tar-
geted low-income elderly individual’ means an indi-
vidual who is 65 years of age or older and whose in-
come does not exceed 100 percent of the poverty line
applicable to a family of the size involved.
‘‘(c) FOR LOW-INCOME DISABLED PERSONS.—
‘‘(1) IN GENERAL.—Subject to subsection (e), a
MediGrant plan shall provide that the percentage of
funds expended under the plan for medical assist-
ance for eligible low-income individuals who are
under 65 years of age and are eligible for such as-
sistance on the basis of a disability (including being
blind) for a fiscal year is not less than the minimum
low-income-disabled percentage specified in para-
graph (2) of the total funds expended under the plan
for medical assistance for the fiscal year.
‘‘(2) MINIMUM
LOW-INCOME-DISABLED
PER-
CENTAGE.—The minimum low-income-disabled per-
centage specified in this paragraph for a State is
equal to 85 percent of the average percentage of the
expenditures under title XIX for medical assistance
in the State during Federal fiscal years 1992
1353
through 1994 which was attributable to expenditures
for medical assistance for mandated benefits fur-
nished to individuals—
‘‘(A) whose coverage (at such time) under
a State plan under title XIX was required
under Federal law, and
‘‘(B) whose coverage (at such time) was on
a basis directly related to disability status (in-
cluding being blind).
‘‘(d) USE OF RESIDUAL FUNDS.—
‘‘(1) IN GENERAL.—Subject to limitations on
payment under section 2123, any funds not required
to be expended under the set-asides under the pre-
vious subsections may be expended under the
MediGrant plan for any of the following:
‘‘(A) ADDITIONAL MEDICAL ASSISTANCE.—
Medical assistance for eligible low-income indi-
viduals (as defined in section 2171(b)), in addi-
tion to any medical assistance made available
under a previous subsection.
‘‘(B) MEDICALLY-RELATED
SERVICES.—
Payment for medically-related services (as de-
fined in paragraph (2)).
‘‘(C) ADMINISTRATION.—Payment for the
administration of the MediGrant plan.
1354
‘‘(2) 
MEDICALLY-RELATED
SERVICES
DE-
FINED.—In this title, the term ‘medically-related
services’ means services reasonably related to, or in
direct support of, the State’s attainment of one or
more of the strategic objectives and performance
goals established under section 2101, but does not
include items and services included on the list under
section 2171(a)(1) (relating to the definition of med-
ical assistance).
‘‘(e) EXCEPTIONS TO MINIMUM SET-ASIDES.—
‘‘(1) ALTERNATIVE MINIMUM SET-ASIDES.—
‘‘(A) IN GENERAL.—A State may provide
in its MediGrant plan (through an amendment
to the plan) for a lower dollar amount of ex-
penditures than the minimum amounts specified
in any (or all) of paragraphs (2) of subsections
(a), (b), and (c) if State determines (and cer-
tifies to the Secretary) that—
‘‘(i) the health care needs of the low-
income populations described in paragraph
(1) of the respective subsection who are eli-
gible for medical assistance under the plan
during the previous fiscal year (or medi-
care premium assistance needs described in
subsection (b)(1)(B)) can be reasonably
1355
met without the expenditure of the
amounts otherwise required to be ex-
pended, and
‘‘(ii) the performance goals estab-
lished under section 2101 relating to the
respective population can reasonably be
met with such lower amount of funds ex-
pended.
‘‘(B) PERIOD OF APPLICATION.—The de-
termination and certification under subpara-
graph (A) shall be made for such period as a
State may request, but may not be made for a
period of more than 3 consecutive Federal fiscal
years (beginning with the first fiscal year for
which the lower amount is sought). A new de-
termination and certification must be made
under such paragraph for any subsequent pe-
riod.
‘‘(C) NO EXCEPTION PERMITTED BEFORE
FISCAL YEAR 1998.—This paragraph may not
apply with respect to a State for a fiscal year
before fiscal year 1998.
‘‘(2) INDEPENDENT CERTIFICATION OF COMPLI-
ANCE WITH GOALS.—
1356
‘‘(A) IN GENERAL.—For purposes of sec-
tion 2151(c), a MediGrant plan shall not be
considered to be in substantial violation of the
requirements of this section if the amount of
actual State expenditures specified in any (or
all) of paragraphs (1) of subsections (a), (b),
and (c) is lower than the minimum amounts
specified in any (or all) of paragraphs (2) of
subsections (a), (b), and (c) if an independent
actuary determines and certifies to the State
that the MediGrant plan is reasonably designed
to result in a level of expenditures which is con-
sistent with the requirements of such sub-
sections.
‘‘(B) LIMIT
ON
VARIATION.—Subpara-
graph (A) shall not apply in the case of a
MediGrant plan for which the actual State ex-
penditures described in any (or all) of para-
graphs (1) of subsections (a), (b), and (c) are
less than 95 percent of the expenditures which
would be made if the amount of State expendi-
tures specified in any (or all) of such para-
graphs was equal to the applicable minimum
amount specified in any (or all) of paragraphs
(2) of subsections (a), (b), and (c).
1357
‘‘(3) TREATMENT
OF
STATES
WITH
NO
OP-
TIONAL BENEFITS.—In the case of a State for which
all expenditures under title XIX for medical assist-
ance in the State during Federal fiscal years 1992
through 1994 were expenditures for medical assist-
ance for mandated benefits, ‘75 percent’ shall be
substituted for ‘85 percent’ each place it appears in
paragraphs (2) of subsections (a), (b), and (c).
‘‘(f) COMPUTATIONS.—
‘‘(1) MINIMUM
PERCENTAGES.—States shall
calculate the minimum percentages under sub-
sections (a)(2), (b)(2), and (c)(2) in a reasonable
manner consistent with reports submitted to the
Secretary for the fiscal years involved.
‘‘(2) EXCLUSION OF PAYMENTS FOR CERTAIN
ALIENS.—For purposes of this section, medical as-
sistance attributable to the exception provided under
section 1903(v)(2) shall not be considered to be ex-
penditures for medical assistance.
‘‘(g) BENEFITS INCLUDED FOR PURPOSES OF COM-
PUTING SET-ASIDES.—In this section, the term ‘man-
dated benefits’—
‘‘(1) means medical assistance for items and
services described in section 1905(a) to the extent
1358
such assistance with respect to such items and serv-
ices was required to be provided under title XIX,
‘‘(2) includes medical assistance for medicare
cost-sharing only to the extent such assistance was
required 
to 
be 
provided 
under 
section
1902(a)(10)(E), and
‘‘(3) does not include medical assistance attrib-
utable to disproportionate share payment adjust-
ments described in section 1923.
‘‘SEC. 2113. PREMIUMS AND COST-SHARING.
‘‘(a) IN GENERAL.—Subject to subsection (b), if any
charges are imposed under the MediGrant plan for cost-
sharing (as defined in subsection (d)), such cost-sharing
shall be pursuant to a public cost-sharing schedule.
‘‘(b) LIMITATION ON PREMIUM AND CERTAIN COST-
SHARING FOR LOW-INCOME FAMILIES INCLUDING CHIL-
DREN OR PREGNANT WOMEN.—
‘‘(1) IN GENERAL.—In the case of a family de-
scribed in paragraph (2)—
‘‘(A) the plan shall not impose any pre-
mium, and
‘‘(B) the plan shall not (except as provided
in subsection (c)(1)) impose any cost-sharing
with respect to primary and preventive care
services (as defined by the State) covered under
1359
the MediGrant plan for children or pregnant
women unless such cost-sharing is nominal in
nature.
‘‘(2) FAMILY DESCRIBED.—A family described
in this paragraph is a family (which may be an indi-
vidual) which—
‘‘(A) includes a child or a pregnant
woman,
‘‘(B) is made eligible for medical assistance
under the MediGrant plan, and
‘‘(C) the income of which does not exceed
100 percent of the poverty line applicable to a
family of the size involved.
‘‘(c) CERTAIN COST-SHARING PERMITTED.—Nothing
in this section shall be construed as preventing a
MediGrant plan (consistent with subsection (b))—
‘‘(1) from imposing cost-sharing to discourage
the inappropriate use of emergency medical services
(delivered through a hospital emergency room, a
medical transportation provider, or otherwise);
‘‘(2) from imposing premiums and cost-sharing
differentially in order to encourage the use of pri-
mary and preventive care and discourage unneces-
sary or less economical care;
1360
‘‘(3) from scaling cost-sharing in a manner that
reflects economic factors, employment status, and
family size;
‘‘(4) from scaling cost-sharing based on the
availability to the individual or family of other
health insurance coverage; or
‘‘(5) from scaling cost-sharing based on partici-
pation in employment training program, drug or al-
cohol abuse treatment, counseling programs, or
other programs promoting personal responsibility.
‘‘(d) COST-SHARING DEFINED.—In this section, the
term ‘cost-sharing’ includes copayments, deductibles, coin-
surance, and other charges for the provision of health care
services.
‘‘SEC. 2114. DESCRIPTION OF PROCESS FOR DEVELOPING
CAPITATION PAYMENT RATES.
‘‘(a) IN GENERAL.—If a State contracts (or intends
to contract) with a capitated health care organization (as
defined in subsection (c)(1)) under which the State makes
a capitation payment (as defined in subsection (c)(2)) to
the organization for providing or arranging for the provi-
sion of medical assistance under the MediGrant plan for
a group of services (including at least inpatient hospital
services and physicians’ services), the plan shall include
a description of the following:
1361
‘‘(1) USE OF ACTUARIAL SCIENCE.—The extent
and manner in which the State uses actuarial
science—
‘‘(A) to analyze and project health care ex-
penditures and utilization for individuals en-
rolled (or to be enrolled) in such an organiza-
tion under the MediGrant plan, and
‘‘(B) to develop capitation payment rates,
including a brief description of the general
methodologies used by actuaries.
‘‘(2) QUALIFICATIONS
OF
ORGANIZATIONS.—
The general qualifications (including any accredita-
tion, State licensure or certification, or provider net-
work standards) required by the State for participa-
tion of capitated health care organizations under the
MediGrant plan.
‘‘(3) DISSEMINATION
PROCESS.—The process
used by the State under subsection (b) and other-
wise to disseminate, before entering into contracts
with capitated health care organizations, actuarial
information to such organizations on the historical
fee-for-service costs (or, if not available, other recent
financial data associated with providing covered
services) and utilization associated with individuals
described in paragraph (1)(A).
1362
‘‘(b) PUBLIC NOTICE AND COMMENT.—Under the
MediGrant plan the State shall provide a process for pro-
viding, before the beginning of each contract year—
‘‘(1) public notice of—
‘‘(A) the amounts of the capitation pay-
ments (if any) made under the plan for the con-
tract year preceding the public notice, and
‘‘(B)(i) the information described under
subsection (a)(1) with respect to capitation pay-
ments for the contract year involved or (ii) the
amounts of the capitation payments the State
expects to make for the contract year involved,
unless such information is designated as proprietary
and not subject to public disclosure under State law;
and
‘‘(2) an opportunity for receiving public com-
ment on the amounts and information for which no-
tice is provided under paragraph (1).
‘‘(c) DEFINITIONS.—In this title:
‘‘(1) CAPITATED
HEALTH
CARE
ORGANIZA-
TION.—The term ‘capitated health care organiza-
tion’ means a health maintenance organization or
any other entity (including a health insuring organi-
zation, managed care organization, prepaid health
plan, integrated service network, or similar entity)
1363
which under State law is permitted to accept capita-
tion payments for providing (or arranging for the
provision of) a group of items and services including
at least inpatient hospital services and physicians’
services.
‘‘(2) CAPITATION PAYMENT.—The term ‘capita-
tion payment’ means, with respect to payment, pay-
ment on a prepaid capitation basis or any other risk
basis to an entity for the entity’s provision (or ar-
ranging for the provision) of a group of items and
services (including at least inpatient hospital services
and physicians’ services).
‘‘SEC. 2115. PREVENTING SPOUSAL IMPOVERISHMENT.
‘‘(a) SPECIAL TREATMENT FOR INSTITUTIONALIZED
SPOUSES.—
‘‘(1) SUPERSEDES OTHER PROVISIONS.—In de-
termining the eligibility for medical assistance of an
institutionalized spouse (as defined in subsection
(h)(1)), the provisions of this section supersede any
other provision of this title which is inconsistent
with them.
‘‘(2) DOES NOT AFFECT CERTAIN DETERMINA-
TIONS.—Except as this section specifically provides,
this section does not apply to—
1364
‘‘(A) the determination of what constitutes
income or resources, or
‘‘(B) the methodology and standards for
determining and evaluating income and re-
sources.
‘‘(3) NO
APPLICATION
IN
COMMONWEALTHS
AND TERRITORIES.—This section shall only apply to
a State that is one of the 50 States or the District
of Columbia.
‘‘(b) RULES FOR TREATMENT OF INCOME.—
‘‘(1) SEPARATE TREATMENT OF INCOME.—Dur-
ing any month in which an institutionalized spouse
is in the institution, except as provided in paragraph
(2), no income of the community spouse shall be
deemed available to the institutionalized spouse.
‘‘(2) ATTRIBUTION OF INCOME.—In determin-
ing the income of an institutionalized spouse or com-
munity spouse for purposes of the post-eligibility in-
come determination described in subsection (d), ex-
cept as otherwise provided in this section and re-
gardless of any State laws relating to community
property or the division of marital property, the fol-
lowing rules apply:
‘‘(A) NON-TRUST PROPERTY.—Subject to
subparagraphs (C) and (D), in the case of in-
1365
come not from a trust, unless the instrument
providing the income otherwise specifically pro-
vides—
‘‘(i) if payment of income is made
solely in the name of the institutionalized
spouse or the community spouse, the in-
come shall be considered available only to
that respective spouse;
‘‘(ii) if payment of income is made in
the names of the institutionalized spouse
and the community spouse, one-half of the
income shall be considered available to
each of them; and
‘‘(iii) if payment of income is made in
the names of the institutionalized spouse
or the community spouse, or both, and to
another person or persons, the income
shall be considered available to each spouse
in proportion to the spouse’s interest (or,
if payment is made with respect to both
spouses and no such interest is specified,
one-half of the joint interest shall be con-
sidered available to each spouse).
‘‘(B) TRUST PROPERTY.—In the case of a
trust—
1366
‘‘(i) except as provided in clause (ii),
income shall be attributed in accordance
with the provisions of this title, and
‘‘(ii) income shall be considered avail-
able to each spouse as provided in the
trust, or, in the absence of a specific provi-
sion in the trust—
‘‘(I) if payment of income is
made solely to the institutionalized
spouse or the community spouse, the
income shall be considered available
only to that respective spouse;
‘‘(II) if payment of income is
made to both the institutionalized
spouse and the community spouse,
one-half of the income shall be consid-
ered available to each of them; and
‘‘(III) if payment of income is
made to the institutionalized spouse
or the community spouse, or both,
and to another person or persons, the
income shall be considered available to
each spouse in proportion to the
spouse’s interest (or, if payment is
made with respect to both spouses
1367
and no such interest is specified, one-
half of the joint interest shall be con-
sidered available to each spouse).
‘‘(C) PROPERTY WITH NO INSTRUMENT.—
In the case of income not from a trust in which
there is no instrument establishing ownership,
subject to subparagraph (D), one-half of the in-
come shall be considered to be available to the
institutionalized spouse and one-half to the
community spouse.
‘‘(D) REBUTTING OWNERSHIP.—The rules
of subparagraphs (A) and (C) are superseded to
the extent that an institutionalized spouse can
establish, by a preponderance of the evidence,
that the ownership interests in income are other
than as provided under such subparagraphs.
‘‘(c) RULES FOR TREATMENT OF RESOURCES.—
‘‘(1) COMPUTATION
OF
SPOUSAL
SHARE
AT
TIME OF INSTITUTIONALIZATION.—
‘‘(A) TOTAL
JOINT
RESOURCES.—There
shall be computed (as of the beginning of the
first continuous period of institutionalization of
the institutionalized spouse)—
‘‘(i) the total value of the resources to
the extent either the institutionalized
1368
spouse or the community spouse has an
ownership interest, and
‘‘(ii) a spousal share which is equal to
1⁄2 of such total value.
‘‘(B) ASSESSMENT.—At the request of an
institutionalized spouse or community spouse,
at the beginning of the first continuous period
of institutionalization of the institutionalized
spouse and upon the receipt of relevant docu-
mentation of resources, the State shall promptly
assess and document the total value described
in subparagraph (A)(i) and shall provide a copy
of such assessment and documentation to each
spouse and shall retain a copy of the assess-
ment for use under this section. If the request
is not part of an application for medical assist-
ance under this title, the State may, at its op-
tion as a condition of providing the assessment,
require payment of a fee not exceeding the rea-
sonable expenses of providing and documenting
the assessment. At the time of providing the
copy of the assessment, the State shall include
a notice indicating that the spouse will have a
right to a fair hearing under subsection (e)(2).
1369
‘‘(2) ATTRIBUTION OF RESOURCES AT TIME OF
INITIAL
ELIGIBILITY
DETERMINATION.—In deter-
mining the resources of an institutionalized spouse
at the time of application for medical assistance
under this title, regardless of any State laws relating
to community property or the division of marital
property—
‘‘(A) except as provided in subparagraph
(B), all the resources held by either the institu-
tionalized spouse, community spouse, or both,
shall be considered to be available to the insti-
tutionalized spouse, and
‘‘(B) resources shall be considered to be
available to an institutionalized spouse, but only
to the extent that the amount of such resources
exceeds the amount computed under subsection
(f)(2)(A) (as of the time of application for med-
ical assistance).
‘‘(3) ASSIGNMENT OF SUPPORT RIGHTS.—The
institutionalized spouse shall not be ineligible by rea-
son of resources determined under paragraph (2) to
be available for the cost of care where—
‘‘(A) the institutionalized spouse has as-
signed to the State any rights to support from
the community spouse;
1370
‘‘(B) the institutionalized spouse lacks the
ability to execute an assignment due to physical
or mental impairment but the State has the
right to bring a support proceeding against a
community spouse without such assignment; or
‘‘(C) the State determines that denial of
eligibility would work an undue hardship.
‘‘(4) SEPARATE
TREATMENT
OF
RESOURCES
AFTER ELIGIBILITY FOR MEDICAL ASSISTANCE ES-
TABLISHED.—During the continuous period in which
an institutionalized spouse is in an institution and
after the month in which an institutionalized spouse
is determined to be eligible for medical assistance
under this title, no resources of the community
spouse shall be deemed available to the institutional-
ized spouse.
‘‘(5) RESOURCES
DEFINED.—In this section,
the term ‘resources’ does not include—
‘‘(A) resources excluded under subsection
(a) or (d) of section 1613, and
‘‘(B) resources that would be excluded
under section 1613(a)(2)(A) but for the limita-
tion on total value described in such section.
‘‘(d) 
PROTECTING
INCOME
FOR
COMMUNITY
SPOUSE.—
1371
‘‘(1) ALLOWANCES TO BE OFFSET FROM IN-
COME
OF
INSTITUTIONALIZED
SPOUSE.—After an
institutionalized spouse is determined or redeter-
mined to be eligible for medical assistance, in deter-
mining the amount of the spouse’s income that is to
be applied monthly to payment for the costs of care
in the institution, there shall be deducted from the
spouse’s monthly income the following amounts in
the following order:
‘‘(A) A personal needs allowance (described
in paragraph (6)(A)), in an amount not less
than the amount specified in paragraph (6)(C).
‘‘(B) A community spouse monthly income
allowance (as defined in paragraph (2)), but
only to the extent income of the institutional-
ized spouse is made available to (or for the ben-
efit of) the community spouse.
‘‘(C) A family allowance, for each family
member, equal to at least 1⁄3 of the amount by
which the amount described in paragraph
(3)(A)(i) exceeds the amount of the monthly in-
come of that family member.
‘‘(D) Amounts for incurred expenses for
medical or remedial care for the institutional-
ized spouse (as provided under paragraph (7)).
1372
In subparagraph (C), the term ‘family member’ only
includes minor or dependent children, dependent
parents, or dependent siblings of the institutional-
ized or community spouse who are residing with the
community spouse.
‘‘(2) COMMUNITY
SPOUSE
MONTHLY
INCOME
ALLOWANCE DEFINED.—In this section (except as
provided in paragraph (5)), the ‘community spouse
monthly income allowance’ for a community spouse
is an amount by which—
‘‘(A) except as provided in subsection (e),
the minimum monthly maintenance needs allow-
ance (established under and in accordance with
paragraph (3)) for the spouse, exceeds
‘‘(B) the amount of monthly income other-
wise available to the community spouse (deter-
mined without regard to such an allowance).
‘‘(3) ESTABLISHMENT OF MINIMUM MONTHLY
MAINTENANCE NEEDS ALLOWANCE.—
‘‘(A) IN GENERAL.—Each State shall es-
tablish a minimum monthly maintenance needs
allowance for each community spouse which,
subject to subparagraph (B), is equal to or ex-
ceeds—
1373
‘‘(i) 150 percent of 1⁄12 of the income
official poverty line (defined by the Office
of Management and Budget and revised
annually 
in 
accordance 
with 
section
673(2)) for a family unit of 2 members;
plus
‘‘(ii) an excess shelter allowance (as
defined in paragraph (4)).
A revision of the official poverty line referred to
in clause (i) shall apply to medical assistance
furnished during and after the second calendar
quarter that begins after the date of publication
of the revision.
‘‘(B) CAP ON MINIMUM MONTHLY MAINTE-
NANCE
NEEDS
ALLOWANCE.—The minimum
monthly maintenance needs allowance estab-
lished under subparagraph (A) may not exceed
$1,500 (subject to adjustment under sub-
sections (e) and (g)).
‘‘(4) 
EXCESS
SHELTER
ALLOWANCE
DE-
FINED.—In paragraph (3)(A)(ii), the term ‘excess
shelter allowance’ means, for a community spouse,
the amount by which the sum of—
‘‘(A) the spouse’s expenses for rent or
mortgage payment (including principal and in-
1374
terest), taxes and insurance and, in the case of
a condominium or cooperative, required mainte-
nance charge, for the community spouse’s prin-
cipal residence, and
‘‘(B) the standard utility allowance (used
by the State under section 5(e) of the Food
Stamp Act of 1977) or, if the State does not
use such an allowance, the spouse’s actual util-
ity expenses,
exceeds 30 percent of the amount described in para-
graph (3)(A)(i), except that, in the case of a con-
dominium or cooperative, for which a maintenance
charge is included under subparagraph (A), any al-
lowance under subparagraph (B) shall be reduced to
the extent the maintenance charge includes utility
expenses.
‘‘(5) COURT
ORDERED
SUPPORT.—If a court
has entered an order against an institutionalized
spouse for monthly income for the support of the
community spouse, the community spouse monthly
income allowance for the spouse shall be not less
than the amount of the monthly income so ordered.
‘‘(6) PERSONAL NEEDS ALLOWANCE.—
‘‘(A) IN GENERAL.—The State MediGrant
plan must provide that, in the case of an insti-
1375
tutionalized individual or couple described in
subparagraph (B), in determining the amount
of the individual’s or couple’s income to be ap-
plied monthly to payment for the cost of care
in an institution, there shall be deducted from
the monthly income (in addition to other allow-
ances otherwise provided under the plan) a
monthly personal needs allowance—
‘‘(i) which is reasonable in amount for
clothing and other personal needs of the
individual (or couple) while in an institu-
tion, and
‘‘(ii) which is not less (and may be
greater) than the minimum monthly per-
sonal needs allowance described in sub-
paragraph (C).
‘‘(B) INSTITUTIONALIZED INDIVIDUAL OR
COUPLE
DEFINED.—In this paragraph, the
term ‘institutionalized individual or couple’
means an individual or married couple—
‘‘(i) who is an inpatient (or who are
inpatients) in a medical institution or
nursing facility for which payments are
made under this title throughout a month,
and
1376
‘‘(ii) who is or are determined to be
eligible for medical assistance under the
State MediGrant plan.
‘‘(C) MINIMUM
ALLOWANCE.—The mini-
mum monthly personal needs allowance de-
scribed in this subparagraph is $40 for an insti-
tutionalized individual and $80 for an institu-
tionalized couple (if both are aged, blind, or dis-
abled, and their incomes are considered avail-
able to each other in determining eligibility).
‘‘(7) TREATMENT OF INCURRED EXPENSES.—
With respect to the post-eligibility treatment of in-
come under this section, there shall be taken into ac-
count amounts for incurred expenses for medical or
remedial care that are not subject to payment by a
third party, including—
‘‘(A) medicare and other health insurance
premiums, deductibles, or coinsurance, and
‘‘(B) necessary medical or remedial care
recognized under State law but not covered
under the State MediGrant plan under this
title, subject to reasonable limits the State may
establish on the amount of these expenses.
‘‘(e) NOTICE AND HEARING.—
‘‘(1) NOTICE.—Upon—
1377
‘‘(A) a determination of eligibility for med-
ical assistance of an institutionalized spouse, or
‘‘(B) a request by either the institutional-
ized spouse, or the community spouse, or a rep-
resentative acting on behalf of either spouse,
each State shall notify both spouses (in the case de-
scribed in subparagraph (A)) or the spouse making
the request (in the case described in subparagraph
(B)) of the amount of the community spouse month-
ly 
income 
allowance 
(described 
in 
subsection
(d)(1)(B)), of the amount of any family allowances
(described in subsection (d)(1)(C)), of the method
for computing the amount of the community spouse
resources allowance permitted under subsection (f),
and of the spouse’s right to a hearing under the
MediGrant plan respecting ownership or availability
of income or resources, and the determination of the
community spouse monthly income or resource al-
lowance.
‘‘(2) RESULTS OF HEARING.—
‘‘(A) REVISION
OF
MINIMUM
MONTHLY
MAINTENANCE
NEEDS
ALLOWANCE.—If either
such spouse establishes in a hearing under this
subsection that the community spouse needs in-
come, above the level otherwise provided by the
1378
minimum monthly maintenance needs allow-
ance, due to exceptional circumstances resulting
in significant financial duress, there shall be
substituted, for the minimum monthly mainte-
nance needs allowance in subsection (d)(2)(A),
an amount adequate to provide such additional
income as is necessary.
‘‘(B) REVISION
OF
COMMUNITY
SPOUSE
RESOURCE ALLOWANCE.—If either such spouse
establishes in such a hearing that the commu-
nity spouse resource allowance (in relation to
the amount of income generated by such an al-
lowance) is inadequate to raise the community
spouse’s income to the minimum monthly main-
tenance needs allowance, there shall be sub-
stituted, for the community spouse resource al-
lowance under subsection (f)(2), an amount
adequate to provide such a minimum monthly
maintenance needs allowance.
‘‘(f) PERMITTING TRANSFER
OF RESOURCES
TO
COMMUNITY SPOUSE.—
‘‘(1) IN GENERAL.—An institutionalized spouse
may, without regard to any other provision of the
MediGrant plan to contrary, transfer an amount
equal to the community spouse resource allowance
1379
(as defined in paragraph (2)), but only to the extent
the resources of the institutionalized spouse are
transferred to (or for the sole benefit of) the com-
munity spouse. The transfer under the preceding
sentence shall be made as soon as practicable after
the date of the initial determination of eligibility,
taking into account such time as may be necessary
to obtain a court order under paragraph (3).
‘‘(2) COMMUNITY
SPOUSE
RESOURCE
ALLOW-
ANCE DEFINED.—In paragraph (1), the ‘community
spouse resource allowance’ for a community spouse
is an amount (if any) by which—
‘‘(A) the greatest of—
‘‘(i) $12,000 (subject to adjustment
under subsection (g)), or, if greater (but
not to exceed the amount specified in
clause (ii)(II)) an amount specified under
the State plan,
‘‘(ii) the lesser of (I) the spousal
share computed under subsection (c)(1), or
(II) $60,000 (subject to adjustment under
subsection (g)),
‘‘(iii) the amount established under
subsection (e)(2); or
1380
‘‘(iv) the amount transferred under a
court order under paragraph (3);
exceeds
‘‘(B) the amount of the resources other-
wise available to the community spouse (deter-
mined without regard to such an allowance).
‘‘(g) INDEXING DOLLAR AMOUNTS.—For services
furnished during a calendar year after 1989, the dollar
amounts specified in subsections (d)(3)(C), (f)(2)(A)(i),
and (f)(2)(A)(ii)(II) shall be increased by the same per-
centage as the percentage increase in the consumer price
index for all urban consumers (all items; U.S. city aver-
age) between September 1988 and the September before
the calendar year involved.
‘‘(h) DEFINITIONS.—In this section:
‘‘(1) The term ‘institutionalized spouse’ means
an individual—
‘‘(A)(i) who is in a medical institution or
nursing facility, or
‘‘(ii) at the option of the State (I) who
would be eligible under the MediGrant plan
under this title if they were in a medical insti-
tution, (II) with respect to whom there has
been a determination that but for the provision
of home or community-based services they
1381
would require the level of care provided in a
hospital, nursing facility or intermediate care
facility for the mentally retarded the cost of
which could be reimbursed under the plan, and
(III) who will receive home or community-based
services pursuant the plan, and
‘‘(B) is married to a spouse who is not in
a medical institution or nursing facility;
but does not include any such individual who is not
likely to meet the requirements of subparagraph (A)
for at least 30 consecutive days.
‘‘(2) The term ‘community spouse’ means the
spouse of an institutionalized spouse.
‘‘SEC. 2116. CONSTRUCTION.
‘‘(a) NO FEDERAL ENTITLEMENT.—Nothing in this
title (including section 2112) shall be construed as creat-
ing an entitlement under Federal law in any individual
or category of individuals for medical assistance under a
MediGrant plan.
‘‘(b) STATE FLEXIBILITY IN BENEFITS, PROVIDER
PAYMENTS, GEOGRAPHICAL COVERAGE AREA, AND SE-
LECTION OF PROVIDERS.—Nothing in this title (other
than section 2111(b)) shall be construed as requiring a
State—
1382
‘‘(1) to provide medical assistance for any par-
ticular items or services;
‘‘(2) subject to section 2111(c), to provide for
any payments with respect to any specific health
care providers or any level of payments for any serv-
ices;
‘‘(3) to provide for the same medical assistance
in all geographical areas or political subdivisions of
the State;
‘‘(4) to provide that the medical assistance
made available to any individual eligible for medical
assistance must not be less in amount, duration, or
scope than the medical assistance made available to
any other such individual; or
‘‘(5) to provide that any individual eligible for
medical assistance with respect to an item or service
may choose to obtain such assistance from any insti-
tution, agency, or person qualified to provide the
item or service.
‘‘(c) STATE FLEXIBILITY WITH RESPECT TO MAN-
AGED CARE.—Nothing in this title shall be construed—
‘‘(1) to limit a State’s ability to contract with,
on a capitated basis or otherwise, health care plans
or individual health care providers for the provision
or arrangement of medical assistance;
1383
‘‘(2) to limit a State’s ability to contract with
health care plans or other entities for case manage-
ment services or for coordination of medical assist-
ance; or
‘‘(3) to restrict a State from establishing capi-
tation rates on the basis of competition among
health care plans or negotiations between the State
and one or more health care plans.
‘‘SEC. 2117. LIMITATIONS ON CAUSES OF ACTION.
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of this Act (including section 1130A), no person (in-
cluding an applicant, beneficiary, provider, or health plan)
shall have a cause of action under Federal law against
a State in relation to a State’s compliance (or failure to
comply) with the provisions of this title or of a MediGrant
plan.
‘‘(b) NO EFFECT ON STATE LAW.—Nothing in sub-
section (a) may be construed as affecting any actions
brought under State law.
‘‘PART C—PAYMENTS TO STATES
‘‘SEC. 2121. ALLOTMENT OF FUNDS AMONG STATES.
‘‘(a) ALLOTMENTS.—
‘‘(1) COMPUTATION.—The Secretary shall pro-
vide for the computation of State obligation and out-
1384
lay allotments in accordance with this section for
each fiscal year beginning with fiscal year 1996.
‘‘(2) LIMITATION ON OBLIGATIONS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the Secretary shall not enter into
obligations with any State under this title for a
fiscal year in excess of the obligation allotment
for that State for the fiscal year under para-
graph (4). The sum of such obligation allot-
ments for all States in any fiscal year (exclud-
ing amounts carried over under subparagraph
(B) and excluding changes in allotments ef-
fected under paragraph (4)(D)) shall not exceed
the aggregate limit on new obligation authority
specified in paragraph (3) for that fiscal year.
‘‘(B) ADJUSTMENTS.—
‘‘(i) CARRYOVER OF ALLOTMENT PER-
MITTED.—If the amount of obligations en-
tered into under this part with a State for
quarters in a fiscal year is less than the
amount of the obligation allotment under
this section to the State for the fiscal year,
the amount of the difference shall be added
to the amount of the State obligation allot-
1385
ment otherwise provided under this section
for the succeeding fiscal year.
‘‘(ii) REDUCTION
FOR
POST-ENACT-
MENT
NEW
OBLIGATIONS
UNDER
TITLE
XIX IN FISCAL YEAR 1996.—The amount of
the obligation allotment otherwise provided
under this section for fiscal year 1996 for
a State shall be reduced by the amount of
the obligations entered into with respect to
the State under section 1903(a) after the
date of the enactment of this Act.
‘‘(3) AGGREGATE LIMIT ON NEW OBLIGATION
AUTHORITY.—
‘‘(A) IN GENERAL.—For purposes of this
subsection, subject to subparagraph (C), the
‘aggregate limit on new obligation authority’,
for a fiscal year, is the pool amount under sub-
section (b) for the fiscal year, divided by the
payout adjustment factor (described in subpara-
graph (B)) for the fiscal year.
‘‘(B) PAYOUT ADJUSTMENT FACTOR.—For
purposes of this subsection, the ‘payout adjust-
ment factor’—
‘‘(i) for fiscal year 1996 is .950,
‘‘(ii) for fiscal year 1997 is .986, and
1386
‘‘(iii) for a subsequent fiscal year is
.998.
‘‘(C) TRANSITIONAL
ADJUSTMENT
FOR
PRE-ENACTMENT-OBLIGATION
OUTLAYS.—In
order to account for pre-enactment-obligation
outlays described in paragraph (4)(C)(iv), in
determining the aggregate limit on new obliga-
tion authority under subparagraph (A) for fis-
cal year 1996, the pool amount for such fiscal
year is equal to—
‘‘(i) the pool amount for such year,
reduced by
‘‘(ii) $24.624 billion.
‘‘(4) OBLIGATION ALLOTMENTS.—
‘‘(A) GENERAL RULE FOR 50 STATES AND
THE DISTRICT OF COLUMBIA.—Except as pro-
vided in this paragraph, the ‘obligation allot-
ment’ for any of the 50 States or the District
of Columbia for a fiscal year (beginning with
fiscal year 1997) is an amount that bears the
same ratio to the outlay allotment under sub-
section (c)(2) for such State or District (not
taking into account any adjustment due to an
election under paragraph (4)) for the fiscal year
as the ratio of—
1387
‘‘(i) the aggregate limit on new obliga-
tion authority (less the total of the obliga-
tion allotments under subparagraph (B))
for the fiscal year, to
‘‘(ii) the pool amount (less the sum of
the outlay allotments for the territories)
for such fiscal year.
‘‘(B) TERRITORIES.—The obligation allot-
ment for each of the Commonwealths and terri-
tories for a fiscal year is the outlay allotment
for such Commonwealth or territory (as deter-
mined under subsection (c)(5)) for the fiscal
year divided by the payout adjustment factor
for the fiscal year (as defined in paragraph
(3)(B)).
‘‘(C) TRANSITIONAL
RULE
FOR
FISCAL
YEAR 1996.—
‘‘(i) IN
GENERAL.—The obligation
amount for fiscal year 1996 for any State
(including the District, a Commonwealth,
or territory) is determined according to the
formula: A=(B-C)/D, where—
‘‘(I) ‘A’ is the obligation amount
for such State;
1388
‘‘(II) ‘B’ is the outlay allotment
of such State for fiscal year 1996, as
determined under subsection (c);
‘‘(III) ‘C’ is the amount of the
pre-enactment-obligation outlays (as
established for such State under
clause (ii)); and
‘‘(IV) ‘D’ is the payout adjust-
ment factor for such fiscal year (as
defined in paragraph (3)(B)).
‘‘(ii) 
PRE-ENACTMENT-OBLIGATION
OUTLAY AMOUNTS.—Within 30 days after
the date of the enactment of this title, the
Secretary shall estimate (based on the best
data available) and publish in the Federal
Register the amount of the pre-enactment-
obligation outlays (as defined in clause
(iv)) for each State (including the District,
Commonwealths, and territories). The total
of such amounts shall equal the dollar
amount specified in paragraph (3)(C)(ii).
‘‘(iii) AGREEMENT.—The submission
of a MediGrant plan by a State under this
title is deemed to constitute the State’s ac-
ceptance of the obligation allotment limita-
1389
tions under this subsection (including the
formula for computing the amount of such
obligation allotment).
‘‘(iv) 
PRE-ENACTMENT-OBLIGATION
OUTLAYS
DEFINED.—In this subsection,
the term ‘pre-enactment-obligation outlays’
means, for a State, the outlays of the Fed-
eral Government that result from obliga-
tions that have been incurred under title
XIX with respect to the State before the
date of the enactment of this title, but for
which payments to States have not been
made as of such date of enactment.
‘‘(D) ADJUSTMENT TO REFLECT ADOPTION
OF
ALTERNATIVE
GROWTH
FORMULA.—Any
State that has elected an alternative growth
formula under subsection (c)(4) which increases
or decreases the dollar amount of an outlay al-
lotment for a fiscal year is deemed to have in-
creased or decreased, respectively, its obligation
amount for such fiscal year by the amount of
such increase or decrease.
‘‘(b) POOL OF AVAILABLE FUNDS.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the ‘pool amount’ under this subsection for—