Medicaid services outlined in the MS 1000 Section, with the exception of Long Term Care and Personal Care, are available to eligibles under the Medically Needy Program. Family Planning Services, WIC, and Child Health Services (EPSDT) will be offered.

1. Those currently receiving Medicaid through AFDC, UP, U-18, SSI, or otherwise Medicaid eligible;
2. Aged and Blind individuals whose countable income and resources are below the SSI payment limitations;

NOTE: Eligibility in the Medically Needy Categories for Aged, Blind and some Disabled individuals is limited to individuals with countable income in excess of SSI limitations, and deceased or other individuals for whom SSI retroactive eligibility cannot be completed (Re. MS 7041). Refer to MS 3322 for the consideration of AD-MN eligibility for certain individuals who allege a disability.

3. Individuals who allege a disability, whose countable income and resources fall below the SSI payment limitations, and whose disability has been denied by SSA (Re. MS 3322 for the criteria which govern the determination of disability by MRT and AD-MN Medicaid eligibility for the disabled);
4. Persons age 21 and older who are inpatients of the Arkansas State Hospital or the George W. Jackson Center; and
5. Persons incarcerated under the penal system who have been charged with or found guilty of a criminal offense; this includes children under age 18 who are under the jurisdiction of the juvenile justice system and who are detained in juvenile detention centers or other alternative placements such as wilderness or boot camps. A person will be considered incarcerated or detained under the penal system until the indictment is dismissed or he is released from custody as not guilty or for some other reason (e.g. bail, parole or pardon). A person on furlough is still considered under custody of the penal system.

1. Those who are categorically related to AFDC, U-18, or SSI, and
2. Those who meet the income and resources criteria of the Medically Needy Program.

The two types of coverage within the Medically Needy Program are Exceptional Medically Needy (EC) and Spend Down Medically Needy (SD).

Reevaluations are required at least every twelve months (the date for the initial reevaluation is counted from the date the EMS-56 or EMS-57 is completed by the County Office). Six month reviews are preferable, when possible.

The Spend Down Medically Needy are those individuals or families whose re- sources fall within the specified limits of the Medically Needy Program, but whose adjusted income is above the Medically Needy Income Level. Individuals or families qualify for Spend Down eligibility on the basis that their excess income (i.e., that above the MNIL for the determination period) is obligated or spent for medical services. Reevaluations of Spend Down Medically Needy individuals or families is not necessary. Spend Down Medically Needy cases have a "fixed" period of Medicaid Eligibility which is automatically ended by the Office of Information Systems. Individuals or families may reapply for Spend Down Medically Needy after their eligibility period has ended.

to determine the proper category through which the individual or family may qualify for Medicaid services (Re. MS 7110 - Multiple Applications).

1. An individual or family receiving an SSI payment or covered by SSI is already eligible for Medicaid and need not apply for the Medically Needy Program.
2. An individual (or family) who seems likely to be eligible for Aged or Blind benefits through SSA and who has countable income and resources under the SSI payment limits will be referred on Form RVI-302 to the District Social Security Office. If a Medically Needy application has been made, it will be denied (Denial Reason 17), as SSI income and resource eligibles in the Aged and Blind categories are not eligible for the Medically Needy Program. This also applies to certain disabled individuals (Re. MS 3322).

1. Retroactive eligibility will be determined for individuals whose SSI eligibility cannot be completed, i.e., deceased persons, etc.
2. Individuals in a Medicaid (non-LTC) institution who are subject to the $30.00 SSI countable income limit instead of the SSI full payment limit, with countable income greater than $30.00 but less than the MNIL, may be eligible as Medically Needy.
3. Certain disabled individuals with income and resources under the SSI limit may be found eligible for Medically Needy if one or more of the conditions listed at MS 3322 exist.

3. If an individual's countable income is above SSI limits and his resources are within the Medically Needy limits, the individual (or family) will be considered for Spend Down Medically Needy eligibility.

1. An individual receiving AFDC or AFDC-UP is already eligible for Medicaid and need not apply for the Medically Needy Program.
2. An individual who seems likely to be eligible for AFDC or AFDC-UP may make an AFDC or AFDC-UP application.
3. An individual denied or apparently not eligible for AFDC or AFDC-UP will be considered for Medicaid eligibility under the Medically Needy Program first as Exceptional Medically Needy and, if not eligible under this group, as "Spend Down" Medically Needy.

1. An individual receiving services under the U-18 Category is already eligible for Medicaid and need not apply for the Medically Needy Program.
2. An individual who seems likely to be eligible for the U-18 Category may make a U-18 Category application.
3. An individual denied or apparently not eligible for the U-18 Category will be considered for Medicaid eligibility under the Medically Needy Program, first, as Exceptional Medically Needy and, if not eligible under this group, as "Spend Down" Medically Needy.
4. Foster children (Re. MS 6500) are also U-18 related and will be considered for eligibility in the Foster Care Medically Needy Categories 96 or 97, if not eligible in U-18 related Category 91.

1. If an individual and spouse both qualify under the same or different SSI- related categories of the Medically Needy Program their categorical relatedness will be established separately; however, their income, resources, and medical expenses will be considered as a unit and eligibility established on that basis. Each will be certified on a separate EMS-57 and each will receive a separate EMS-700 or EMS-55 system generated notice.
2. When a family unit includes an SSI or AFDC recipient(s), the AFDC or SSI recipient's income, resources, and medical expenses are excluded from eligibility considerations. Only the income, resources, and medical expenses of the remaining family members are used in establishing Medically Needy eligibility. For purposes of Medically Needy eligibility the SSI and AFDC recipient(s) are not included in the family count.
3. If there is an AFDC ineligible child under the age of 18 living with an AFDC grant family or an AFDC Medically Needy family, the child can be considered for U-18 Medically Needy.

Individuals or families whose income exceeds the MNIL will be considered for Spend Down Medically Needy. These individuals or families may qualify if their excess income (i.e., that above the MNIL) is obligated or spent for medical services.

1. Exceptional Medically Needy - The cost of Part B Medicare will not be considered as a medical expense for the Exceptional Medically Needy since the Agency will assume the cost of the premium. If the premium has been withheld from the individual's Social Security check, it will be added back in for the eligibility determination.
2. Spend Down Medically Needy - The cost of Part B Medicare is considered a deductible expense for individuals who must Spend Down to become eligible, since it is not paid by the Agency. The premium for Part B Medicare is included in the Spend Down as a noncovered medical expense.

Excess income is the dollar amount by which the individual or family net income exceeds the Medically Needy Income Level.

Spend Down is the requirement that the individual or family obligate all excess income (i.e., that above the MNIL) for medical expenses before eligibility begins.

Example: A man deserts his family on July 1st. His wife makes AFDC-MN application on July 21st for herself and their children, and she requests assistance for June, July, and August. Due to a heavy workload, the Service Representative does not complete the certification until September 2nd and, prior to certification, she learns the family moved from the state on September 1st. Given these circumstances, a 2 month Spend Down (July and August) will be worked, as eligibility does not exist for June (no deprivation) or for September (nonresidence).

The Spend Down entitlement period is a "fixed" period of Medicaid eligibility beginning either the first day of the Spend Down period if excess income is obligated by insurance premiums, copayments and/or uncovered incurred expenses (Re. MS 7632) or the day that the coverable medical expenses exceed the remaining excess income (Re. MS 7633) and ending the last day of the period. An entitlement period may cover up to one, two or three month(s).

The only effect date specific eligibility has on the entitlement period is that the end date for a period (last day of a month) may be changed after certification if a county worker becomes aware that an individual or family is no longer eligible for the remainder of the period, e. g., someone has inherited or has been awarded a large sum of money.

The last remaining excess income which is exceeded by deducting a daily total of incurred medical expenses included in the chronological spend down is the applicant's unmet liability (Re. MS 7631). This amount, rounded to the next lower dollar, is input on the EMS-56 or EMS-57 for the individual(s) who has medical expenses on the Spend Down date (Re. MS 7700). All claims for services incurred on the date of Spend Down will be processed against unmet liability until the liability has been satisfied (i.e., unmet liability is treated like a deductible).

The applicant is responsible for payment of the unmet liability amount.

With date specific eligibility, an individual's or family's eligibility for exceptional Medically Needy may begin or end on any day of a month (Re. MS 7622). When found eligible, the certification period will begin on the day application was made, unless retroactive coverage is needed. If retroactive coverage is needed and if eligibility is established, the certification period may begin up to 3 months prior to the date of application (but not on the first day of a retroactive month, unless application was made on the first day of a month).

Termination of benefits does not affect the client's right to make subsequent applications.

NOTE: Under current policy, eligibility for AABD-EC is restricted to deceased individuals or other persons for whom SSI retroactive eligibility cannot be determined, and individuals in non-LTC institutions who are subject to the SSI $30.00 countable income limit (Re. MS 7041). EXCEPTION: Some individuals may be found eligible for Cat. 46-AD (EC) if certain conditions apply (Re. MS 3322).

All applications will be made on Agency documents. This requirement is necessary because: a legal document is needed to indicate the individual's intent to apply; the date of the application must be recorded; and a written application informs the applicant of his rights and responsibilities for giving the Agency accurate information for determination of eligibility. The application may be introduced in court in cases of fraud.

On-site applications are taken at Arkansas Children's Hospital (ACH) and the University of Arkansas for Medical Sciences (UAMS) from individuals residing in all counties of the State. Applications are also taken at numerous other hospitals and counseling centers around the state by outstationed DEMS workers.

The County Office will review each application, submit an EMS-56 to data entry, and mail an EMS-700 or EMS-55 to the applicant. A copy of the EMS-700 (or memorandum, if system notice was generated) will be mailed to ACH, 804 Wolfe St., Little Rock, AR 72201, Attn. Financial Counselor.

Upon disposition of the application, the County Office will mail a copy of the EMS-700 (or memorandum, if a system notice was generated) to UAMS, 4301 W. Markham, Little Rock, AR 72205, Attn: Admissions Office, Mail Slot #729.

NOTE: Normally, only one (1) AFDC or U-18 related case can be certified per household, as families are usually budgeted together and natural/ adoptive parents are budgeted with their children. There may be more than one case per household if there is more than one family in the home, or if there is a stepparent or grandparent in the home, etc. (Re. MS 7611).

Reapplication for Medically Needy Services will be made in the same manner as initial applications. Previous records will be reviewed. If the applicant has applied for or received assistance in another county, the record(s) will be requested from that county.

1. An application is a signed request for payment of medical services by an individual or his authorized representative.
2. An inquiry is a request for information. An inquiry is distinguished from an application by the intent of the person to receive information rather than to apply.

However, when counties have received applications or EMS-62 Presumptive Eligibility application packets for individuals previously interviewed by workers at hospitals (ACH, UAMS, Disproportionate Share, etc.) or by Qualified Providers, it will not be necessary to schedule an office interview at the DHS County Office unless a worker has valid reasons for conducting a second face-to-face interview.

1. Explanation of the Medically Needy Program and the Agency regulations that affect the applicant. The explanation will be in terms the applicant can understand. The informational pamphlet entitled "Your Guide to Medicaid Services in Arkansas" will be given to the applicant.
2. Explanation of the Agency's responsibility for carrying out policy in determining eligibility; of the applicant's responsibility for cooperating in the establishment of eligibility; of the mandatory assignment of rights to Medical support/third party liability (Re. MS 1350); of the obligation to file third party resource claims within a reasonable period of time; of the applicant's obligation to cooperate in Child Support Enforcement Activities (Re. MS 1310); of the information needed to establish eligibility; and of the confidential way in which the Agency treats information.
3. Explanation of the requirement that the applicant and each person included in the MNIL must have or apply for, a Social Security Number as a condition of eligibility (Re. MS 1390).
4. Explanation of the right to a hearing if the applicant is dissatisfied with the Agency's handling of the application or of the case.
5. Explanation of the Agency time limits for completion of applications.
6. Explanation of Child Health Services (EPSDT), Family Planning, WIC, the Food Stamp Program, the Medical Assistance Program, and Service Programs.

The Agency has the responsibility for informing applicants, recipients, and clients that assistance and services are provided on a nondiscriminatory basis and of their right to file a complaint with the Agency or Federal Government if it is thought that discrimination has occurred on the basis of race, color, national origin, or handicap.

The Service Representative will document each task completed during the interview and will also record in the narrative, and/or on the forms, essential social and financial information.

During the initial application interview Forms EMS-86, EMS-87, EMS-96, EMS-607 and EMS-662 will be completed by the Service Representative. The applicant or his authorized representative will complete and sign form EMS-95. Forms EMS-116 and EMS-117 will be needed for AFDC-MN applications. The EMS-2650 (if applicable) and PUB-182 will be orally reviewed and given to the applicant/ representative. If disability is to be established, the EMS-81, EMS-106, EMS-107 (or EMS-701) and EMS-108 will be completed for MRT (Re. MS 3322 section). For SSN enumeration procedures, refer to MS 1390. At the conclusion of the interview, the applicant or representative will be given an EMS-002 to indicate the documents needed for the eligibility determination. At least 10 days will be given for return of the items needed, or longer if the applicant requests.

Applications will be registered on WIMA using the dates they are received by the County Office. Register numbers will be system assigned to each application and the numbers entered on Forms EMS-95. The category entered on WIMA will be 1M (Cat. 16 or 17) for AA-MN; 2M (Cat. 26 or 27) for AFDC-MN; 3M (Cat. 36 or 37) for AB-MN; 4M (Cat. 46 or 47) for AD-MN; 5M (Cat. 56 or 57) for U-18-MN; 6M (Cat. 66 or 67) for PW-MN; 7M (Cat. 76 or 77) for UP-MN; 8M (Cat. 86 or 87) for RMA-MN; or 9M (Cat. 96 or 97) for FC-MN. (The Division of Children and Family Services will be responsible for completing and registering applications for Cat. 96 and 97).

A home visit will be made only if necessary to clear all points of eligibility.

Conflicting evidence will be resolved before approval of an application.

AD Medically Needy cases, when an MRT disability determination is required, will be disposed of within 90 days from the date of application by one of the following actions: approval, denial, or withdrawal.

1. Record all pertinent information in the case narrative (information included on forms will not be repeated).
2. Complete Form DHS-3300 for referral for Family Planning or WIC if requested by the client.
3. Complete Form EMS-115, if appropriate.
4. Complete Form EMS-607.
5. Code Form EMS-87 for Reevaluation or next anticipated change (EC cases). For SD cases attach Form EMS-87 to the case record.
6. Indicate approval and date on Form EMS-88 (Control Sheet).
7. Complete Form EMS-56 or EMS-57 and submit for data entry to authorize eligibility. An existing case number should be used whenever possible.
8. Notify client by Form EMS-700 or EMS-55. Approvals for Spend Down will include the amount of the recipient's unmet liability on the day of Spend Down.

1. Record pertinent information in the case narrative (information included on forms will not be repeated). Only the factor that makes the applicant ineligible will be verified; however, if verification of other factors of eligibility has been obtained, these will be recorded.
2. Complete Form DHS-3300 for referral for Family Planning Services or WIC if requested by the client.
3. Indicate denial and date on Form EMS-88 (Control Sheet).
4. Submit EMS-95 with denial information on front page to data entry.
5. Notify client by Form EMS-700 or EMS-55.
6. For withdrawal only, obtain a signed written statement from the applicant that indicates he/she wishes to withdraw the application.

1. Obtain from the applicant the new address, the name of the county to which the applicant has moved and any other pertinent information regarding the move.
2. Complete EMS-95 for denial on WIMA (Denial Reason 53).
3. Forward the application, including all forms which have been completed and/or signed by the applicant and any other information which has been obtained regarding the applicant's eligibility, to the new residence county with an explanatory memorandum attached.
4. Indicate transfer and date of transfer on Form EMS-88.

Upon receipt of a transferred application, the receiving county will enter the application on WIMA using the original date of application. The original date of application will also be used on the EMS-56 or EMS-57 if the application is approved. The Service Representative will record the date the transferred application was received on form EMS-88 for tracking.

When action on an application will be delayed because of the County Office or MRT, the applicant will be notified by the County Office of the reasons for the delay and of his right to an appeal via Form EMS-700.

If the applicant has been instructed by EMS-002 to provide information to clear eligibility but fails to do so by the end of the specified time, the application will be denied by EMS-700 or EMS-55. If the applicant is having difficulty providing essential information and requests additional time, the Service Representative will acknowledge the request by sending an EMS-700 that clearly specifies the extended time period and what information is needed by the end of the extended time period; and will also assist the applicant in obtaining the information, if possible. If the information has not been provided by the end of the extended time period, the application will be denied by EMS-700 or EMS-55.

To be eligible for the Medically Needy Program, an applicant must meet the basic categorical eligibility requirements outlined in the following paragraphs for either AFDC, SSI (AABD), or U-18. If it is obvious the applicant cannot meet the requirements for any category, the application will be denied without further processing.

1. AFDC Age Requirement (FA 2210).
2. Citizenship or Alienage Requirement (MS 6700).
3. Residence Requirement (MS 2200).
4. Social Security Enumeration Requirement (MS 1390).
5. Assignment of Rights to Medical Support/Third Party Liability Requirement (MS 1350).
6. AFDC Deprivation of Parental Care and Support Requirement (FA 2240). For UP-MN, refer to FA 2241 and MS 7321.1.
7. Cooperation in Child Support Enforcement activities (MS 1310). (DOES NOT APPLY TO UP-MN.)
8. AFDC Relationship Requirement and Living with Specified Relative (FA 2252).
9. Determination of Need; determination of need for the AFDC-Medically Needy and UP-Medically Needy differs from the AFDC need determination in the following ways:

Standard of Need - As with AFDC, in determining eligibility, parents will be included in the need standard with their natural/adoptive children. Normally, all of the full siblings in the household will be included in the budget with their natural/adoptive parents. However, a parent may choose to exclude a child and that child's income from a case budget if inclusion of that child and the child's income would cause ineligibility for the other children. Children may also be excluded for other reasons, and the parent who applies need not state the reason. (Re. MS 7611 for additional information on need standards).

1. It is not necessary to compute a standard AFDC budget.
2. The $30.00 plus 1/3 earned income exclusion is not allowed for either initial or continuing eligibility determinations.
3. The Lump Sum Payment treatment does not apply - a lump sum payment received in the determination period (i.e. in the month for EC cases or in the quarter for SD cases), will be considered as income in the period and, to the extent retained, a resource in the following period.
4. The income of an alien sponsor is disregarded (Re. FA 2377.4).

2. Resource Limitations and Computation - Resource eligibility for the AFDC-Medically Needy and UP-Medically Needy is determined by computing countable resources as specified in FA 2310-2344 and comparing them with the Medically Needy Resource limitations specified under MS 7500. There is no applicable transfer of resource provision which applies to AFDC-MN or UP-MN, i.e., if uncompensated transfers have occurred, no periods of ineligibility will be imposed.

Methods used for verification of eligibility factors for AFDC grant cases also apply to the AFDC-Medically Needy and UP-Medically Needy. For AFDC-MN only (Not UP-MN), this includes the Medical Review Team procedure for determination of disability or blindness . Disability is verified based on submission to MRT of Forms EMS-81 and/or EMS-107 and Form EMS-108. Blindness is based on submission of Forms EMS-701 and EMS-108. MRT reports its findings of approval or denial of disability on form EMS-109. Verification of disability based on receipt of an SSA or SSI disability payment or letter of entitlement may be used in lieu of the MRT procedure. All other eligibility factors will be reasonably established before submitting information to MRT for a decision.

If a two parent family with dependent children meets all of the requirements for AFDC-UP, except for income and/or resources, their income and resources should be compared to the Medically Needy standards for MN-EC or MN-SD eligibility.

NOTE: If an applicant does not meet the above criteria at application, or during the month of application, eligibility cannot begin until the first day of the month in which the criteria are met. (Example: An individual loses his job on May 15th, and applies for UP-MN on May 16th. He worked 110 hours in May before losing his job. He will not have been unemployed for 30 consecutive days by the end of May; therefore, his family will not be eligible for Medicaid during May. He will have been unemployed for 30 days on June 14th, however. Assuming all other eligibility criteria are met, Medicaid benefits could begin June 14th.

There will be no periodic reporting requirements for UP-MN. However, clients should report all changes within ten days.

If all of the UP requirements are met in any of the 3 months prior to UP-MN application and if there are unpaid Medical bills, retroactive coverage may be given for any of the 3 retroactive months.

If all of the eligibility requirements with the exception of income are met, e.g., countable earnings (at less than 100 hours per month) are over the MNIL and if there are unpaid Medical bills, a Medically Needy Spend Down may be considered.

If a pregnant woman has income above the MNIL but below 133% of Poverty Level, then SOBRA eligibility (MS 5600) will be determined prior to determining eligibility for Spend Down.

1. "Aged" is defined as 65 years old or older.
2. "Blindness" is defined as central visual acuity of 20/200 or less with best correction or a limited visual field of 20 degrees or less in the better eye (Re. MS 3322 - 3323.2).
3. "Disability" is defined as a physical or mental impairment which prevents the individual from doing any substantial gainful work (for a child under 18, an impairment of comparable severity) and which has lasted or is expected to last for at least 12 months or is expected to result in death (Re. MS 3322 - 3323.2).

2. Citizenship or Alien Status Requirement (Re. MS 6700).
3. Residence Requirement (Re. MS 2200).
4. Social Security Enumeration Requirement (Re. MS 1390).
5. Assignment of rights to Medical support/third party liability Requirement (Re. MS 1350).
6. Cooperation in Child Support Enforcement Activities (Re. MS 1310).
7. Countable income equal to or greater than SSI payment limitations (Re. MS 7041 for exceptions).
8. SSI Countable Resource Limitations and Resource Treatment (countable resource limits are: $2,000 for an individual and $3,000 for a couple "living together", one or both eligible. Re. MS 7500 for resource levels).

Methods of verification used for AABD Long Term Care cases apply to the AABD Medically Needy. Procedures used for verification of categorical eligibility, citizenship or alien status and for determination of countable income are specified in the Long Term Care section of this manual; categorical relatedness is covered under MS 3321 through MS 3323.2; citizenship and alien status are covered under MS 3324; resource limitations and treatment are covered under MS 3330 through MS 3339.8; and computation of income is covered under MS 3340 through MS 3348.1.

1. Age Requirement - Under 18 years of age (Re. FA 2210).
2. AFDC Relationship Requirement and Living with Specified Relative (Re. FA 2252) - (These do not apply to individuals who are emancipated or who have been removed from the custody of their parents by court order). Refer to MS 6040, #2; MS 6130; and MS 6270 for related policy.
3. Citizenship or Alienage Requirement (Re. MS 6700).
4. Residence Requirement (Re. MS 2200).
5. Social Security Enumeration Requirement (Re. MS 1390).
6. Assignment of rights to Medical Support/Third Party Liability Requirement (Re. MS 1350).
7. Cooperation in Child Support Enforcement Activities (Re. MS 1310).
8. Resource Limitations of the Medically Needy Program (Re. MS 7500).
9. AFDC computation of Income - Earned and Unearned. (Exceptions and limitations which apply to the AFDC-Medically Needy also apply to the U-18 Medically Needy. Re. MS 7320 #9 a.).

Resource eligibility for the U-18 Medically Needy is determined by computing countable resources as specified under FA 2310-2344 and comparing them with the Medically Needy Resource limitations specified under MS 7500. There is no applicable transfer of resource provision which applies to U-18-MN, i.e., if uncompensated transfers have occurred, no periods of ineligibility will be imposed.

Foster Children (Re. MS 6500) who do not meet the income and/or resource need requirements of State FC-Cat. 91 (U-18 criteria - Re. MS 6040) or of Title IV-E-FC- Cat. 92 (AFDC criteria - Re. FA Manual) may be considered for Medically Needy FC - EC (Cat. 96) or SD (Cat. 97) by comparing income and resources to the Medically Needy MNIL and MNRL. The Division of Children and Family Services (DCFS) will determine IV-E and Medicaid eligibility for Foster Children.

If a Foster Child reenters his parent's home, the child's Medicaid eligibility redetermination will include parental income and resources, even if the reentry is a trial placement and the Agency retains custody.

Income may be received in cash (including checks, money orders, etc.) or in- kind (including items such as free rent, free food, etc.). The cash value of items received in-kind must be determined. The value of infrequently and irregularly received items such as small gifts of clothing will not be considered as income.

1. Individuals with countable income less than the SSI payment limitations are not eligible for Medically Needy consideration unless they are: (a) deceased or other persons for whom SSI retroactive eligibility cannot be determined; (b) individuals in non-LTC institutions who are subject to the SSI $30.00 countable income limit (Re. MS 7041); or (c) certain disabled individuals who meet the requirements at MS 3322. The net monthly income of an individual in any of the above groups will be compared to the monthly Medically Needy Income Level to determine EC eligibility.
2. Those individuals whose countable income is greater than the SSI payment limitations will be evaluated on a quarterly basis to determine Medically Needy Spend Down (SD) eligibility. The individual or couple's net quarterly income in these cases will be compared to the Quarterly Medically Needy Income Level to determine SD liability and eligibility.

The specific process for determining Spend Down eligibility is found in MS 7630.

1. MS 3340 - MS 3341 specifies the general consideration of income and how it is evaluated.
2. MS 3342 specifies the extent of consideration of income involving separated couples, (i.e. those not living together in the same household).
3. MS 3343 specifies the means for determining and verifying earned income.
4. MS 3344 - 3344.5 specifies the means for determining income from self- employment.
5. MS 3345 specifies sources of unearned income.
6. MS 3346 - MS 3346.4 specifies procedures for determination and verification of unearned income.
7. MS 3347 - MS 3347.2 defines in-kind support and maintenance and other in- kind income, specifies the value determination for each type, and specifies items excluded (not considered as in-kind support and maintenance).
8. MS 3348 - MS 3348.1 specifies income exclusions applicable to the AABD Medically Needy for determination of net countable income.

Deeming procedures are specified as follows:

1. Determine the applicant's countable income (allow SSI exclusions - Re. MS 3348). Determine if the countable income is equal to, above, or less than the individual SSI Standard Payment Amount (SPA); then proceed to Step 2 of the deeming process.
2. Determine the total income of the ineligible spouse by types, earned and unearned, less any excluded from deeming (Refer to MS 7440 to determine income excluded from deeming). Proceed to step 3.
3. From the ineligible spouse's income, deduct a living allowance for each ineligible child in the home (i.e. those not receiving TEA Cash Assistance or SSI as blind or disabled children. Note: Any children under the TEA Cash family cap, not included in the TEA cash grant, are allowed the living allowance). Income of the child is used to reduce this allowance unless it is excluded as student earned income; Refer to MS 7440, #10 to determine whether any of the student earned income is used to reduce the living allowance). The living allowance is deducted from unearned income first, and any unused balance is then deducted from earned income; proceed to 4.
4. Total the ineligible spouse's remaining income by type, earned and unearned, with the applicant's gross earned and unearned income and treat the two totals of income as for an eligible couple:

5. Compare the countable income, after deeming, to the two person SSI payment standard. If countable income is less than the two person SPA, and the applicant's own income in step 1 was less than the individual SPA, the applicant cannot be considered for Medically Needy. Referral will be made to SSA for SSI eligibility determination (Re. MS 7041 for exceptions). Any other combination of individual SPA eligibility (Step 1) vs. the couple's SPA eligibility (Step 5) may be considered for Medically Needy Spend Down. To illustrate:

If countable income is under the 1 person SPA and under the 2 person SPA - Refer to SSA.

NOTE: For individuals who allege a disability, refer to MS 3322 before referring to SSA. If MRT will make the disability determination, do not refer to SSA, consider AD-MN.

If countable income is under the 1 person SPA and over the 2 person SPA - Consider MN-SD

If countable income is over the 1 person SPA and under the 2 person SPA - Consider MN-SD

If countable income is over the 1 person SPA and over the 2 person SPA - Consider MN-SD

6. To determine Medically Needy - SD liability, the countable income will be compared to the two person MNIL. The excess over the two person MNIL is the applicant's Spend Down liability.

1. Determine the gross monthly income of the ineligible parent(s) by type, earned and unearned less income excluded from deeming (Refer to MS 7440 to determine income excluded from deeming).
2. From the ineligible parent(s)' income deduct a living allowance for each ineligible child in the home (i.e., those not receiving AFDC or SSI as blind or disabled children). Any income of the child is used to reduce this allowance unless it is excluded as student earned income. Refer to MS 7440, #10 to determine whether any of the student earned income is used to reduce the living allowance). The living allowance is deducted from unearned income first, and any unused balance is then deducted from earned income.
3. Continue the deeming process as follows:

1. From unearned income deduct the general exclusion ($220.00 - $20.00 = $200.00).
2. From earned income, deduct the work expense allowance plus one-half (1/2) the remaining balance ($1100.00 - $65.00 = $1035.00 divided by 2 = $517.50).
3. Total remaining earned and unearned income ($517.50 + $200.00 = $717.50).
4. From the total remaining income deduct the SSI SPA for the ineligible parent ($717.50 - $446.00 = $271.50).
5. $271.50 is deemed to the child as unearned income. This amount would be added to the child's own income as unearned income for his eligibility determination ($271.50 + $50.00 = $321.50 less the $20.00 general exclusion leaves $301.50 as countable income to the child).

NOTE: If the child's countable income is under the SSI/SPA, refer to MS 3322 to determine whether SSA or MRT will make the disability determination, and whether or not to refer to SSA. If the allegation is blindness and the countable income is under the SSI/SPA, refer to SSA.

1. Complete Steps 1 through 4 of Spouse to Spouse deeming as indicated in MS 7431 - Deeming of Income from an Ineligible Spouse;
2. Compare the result derived from Step 4 of MS 7431 to the couple's SSI SPA.
3. If the couple's income determined under Spouse to Spouse deeming is equal to or less than the couple's SSI SPA, there is no income to deem to the child;
4. If the couple's income exceeds the couple's SSI SPA, all of the countable income above the SPA is deemed to the child as unearned income. If more than one eligible child is in the home, divide the income equally to each child. The amount deemed to the child as unearned income is subject to the $20/mo. general exclusion in his eligibility determination.

NOTE: If the child's countable income is under the SSI/SPA, refer to MS 3322 to determine whether SSA or MRT will make the disability determination, and whether or not to refer to SSA. If the allegation is blindness and the countable income is under the SSI/SPA, refer to SSA.

NOTE: If the child's countable income is under the SSI/SPA, refer to MS 3322 to determine whether SSA or MRT will make the disability determination, and whether or not to refer to SSA. If the allegation is blindness and the countable income is under the SSI/SPA, refer to SSA.

1. Assistance or Income based on Need - Excludes payments by any Federal Agency, State or political subdivision, SSI payments and any income which was taken into account in determining such assistance. Exclusion applies to V.A. Pension but not to V.A. Compensation. Also excludes AFDC payments and income which was taken into account in determining assistance (including all income of a stepparent in households where there is a stepparent).
2. Portions of Grants, Scholarships or Fellowships used to pay tuition and fees at an educational institution or the cost of Vocational Technical training which is preparatory for employment.
3. Foster Care Payments received for an ineligible child.
4. Food Stamps and Department of Agriculture donated foods.
5. Home produce grown for personal consumption.
6. Refund of income taxes, real property taxes, or tax refunds on food purchased by the family.
7. Income used to comply with the terms of court-ordered support and Title IV-D support payments.
8. The value of In-Kind Support and Maintenance provided to ineligible members of the household.
9. Income excluded by other Federal Statutes.
10. Earned income of an ineligible child who is a student unless the child makes such income available (contributes) to the family. This income would not be used to offset the living allowance which is deducted from parental income in the deeming process. If a contribution is being made by the student, consider only the amount contributed as available income.
11. Income necessary for a plan to achieve self support (i.e., Approved Plan through Rehabilitation Services).

1. Determine the child's countable resources (allow SSI exclusions). If countable resources exceed the one person Medically Needy Resource Limit (MNRL) the child is ineligible. If countable resources are less than or equal to the one person MNRL, proceed to b.
2. Determine the ineligible parent(s) countable resources (allow SSI exclusions). If countable resources are less than or equal to the appropriate MNRL there are no resources to be deemed and the child is eligible. If countable resources exceed the appropriate MNRL, deem the excess (i.e., countable resources above $2,000 or 3,000) to the child, and proceed to c.
3. Compare the child's countable resources, after deeming, to the one person MNRL. If countable resources exceed the one person MNRL, the child is ineligible. If countable resources are less than or equal to the one person MNRL, the child is eligible.

Income is treated differently for the Exceptionally Needy (EC) and Spend Down (SD) groups; however, eligibility for both groups (EC and SD) is determined using the Medically Needy Income Levels below. All cases will first be considered for Exceptionally Needy and, if necessary, for Spend Down.