Effect on Medicaid of Restoring Eligibility to Those Who Lost It because of Cost-of-Living Increases in Old-Age, Survivors, and Disability Insurance

HRD-77-88: Published: May 20, 1977. Publicly Released: May 20, 1977.

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The wide variation in State Medicaid eligibility standards makes it difficult to assess the possible effects on the Social Security Act's title XIX (Medicaid) program of an amendment which would restore Medicaid eligibility to those who lost it because of the 1974, 1975, and 1976 cost-of-living increases in social security retirement, survivors, and disability benefits.

The title II cost-of-living increases effective in July of 1974, 1975, and 1976 could have resulted in an individual losing Federal Supplemental Security Income (SSI) payments, mandatory State supplement payments, optional State supplement payments, or Aid for Dependent Children payments. If these increases caused a person to lose Federal SSI, but State mandatory and/or optional supplements were retained, the person's Medicaid eligibility would not have been affected. The worst that could happen to an SSI or Medicaid recipient who resides in one of the 33 states which uses the January 1972 criteria or one that covers the medically needy is that the person's spend-down amount would increase. In the other 16 states, it is possible for a person to have lost Medicaid benefits because of the cost-of-living increases. Using the most recently published data on Medicaid expenditures, the estimated maximum cost of restoring Medicaid eligibility to those who lost it because of the cost-of-living increase of July 1976 would be about $23 million, somewhat more than half of which would be Federal funds. No data were available about individuals who lost benefits because of the earlier cost-of-living increases.

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