(a) Basic optional coverage rule. If the agency elects the option under §435.121 to provide mandatory eligibility for aged, blind, and disabled SSI beneficiaries using more restrictive requirements than those used under SSI, the agency may provide eligibility as optional categorically needy to additional individuals who meet the requirements of this section.

(b) Group composition. Subject to the conditions specified in paragraphs (d) and (e) of this section, the agency may provide Medicaid to individuals who:

(1) Meet the nonfinancial criteria that the State has elected to apply under §435.121;

(2) Meet the resource requirements that the State has elected to apply under §435.121; and

(3) Meet the income eligibility standards specified in paragraph (c) of this section.

(c) Criteria for income standards. The agency may provide Medicaid to the following individuals who meet the requirements of paragraphs (b)(1) and (b)(2) of this section:

(1) Individuals who are financially eligible for but not receiving SSI benefits and who, before deduction of incurred medical and remedial expenses, meet the State's more restrictive eligibility requirements described in §435.121;

(2) Individuals who meet the income standards of the following eligibility groups:

(i) Individuals who would be eligible for cash assistance except for institutional status described in §435.211;

(ii) Individuals who are enrolled in an HMO or other entity and who are deemed to continue to be Medicaid eligible for a period specified by the agency up to 6 months from the date of enrollment and who became ineligible during the specified enrollment period, as described in §435.212;

(iii) Individuals receiving home and community-based waiver services described in §435.217;

(iv) Individuals receiving only optional State supplements described in §435.234;

(v) Institutionalized individuals with income below a special income level described in §435.236;

(vi) Aged and disabled individuals who have income below 100 percent of the Federal poverty level described in section 1905(m) of the Act.

(3) Individuals who qualify for special status under §§435.135 and 435.138, and with respect to whom the State elects to disregard some or the maximum amount of title II payments permitted to be disregarded under those sections.

(d) Use of more liberal methods. The agency may elect to apply more liberal methods of counting income and resources that are approved for this eligibility group under the provisions of §435.601.

[58 FR 4928, Jan. 19, 1993]