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24 UNDERSTANDING MEDICAID HOME AND COMMUNITY SERVICES: A PRIMERtain former SSI beneficiaries. (MandatoryMedicaid protection for certain children with disabilitiesand certain working persons with disabilitiesis discussed later in this chapter.)State 209(b) optionMedicaid for the “Aged, Blind, and Disabled” hadhistorically always been linked to receipt of cashassistance benefits. When SSI replaced state-onlyprograms of aid for elderly persons and personswith disabilities, it was expected to lead to largeincreases in the numbers of SSI beneficiaries. The209(b) option was enacted along with SSI in 1972to enable states to avoid experiencing similarlylarge increases in Medicaid enrollment and costs.Many Medicaid eligibility rules in 209(b) followSSI. But states may choose, instead, to use some orall of the more restrictive Medicaid rules in effectin their state on January 1, 1972, shortly before SSIwas enacted. Typically these states have retainedat least some of their pre-SSI rules on countableincome or resources. Some use more stringent criteriafor determining blindness or disability.To counterbalance the potential negative effects ofthe 209(b) option on SSI beneficiaries, Federalrules require 209(b) states to allow any residentswho are elderly, blind, or have disabilities—including those with too much income for SSI—to spend down to the state’s Medicaid incomestandard if their expenses for medical and remedialservices so erode their income that their “net”remaining income would be less than a standardset by the state. This requirement creates a medicallyneedy-like program for this population,even in states that have not chosen specifically tocover the medically needy as an option, as inIndiana, Missouri, and Ohio. Spend-down rulesfor 209(b) are virtually identical to spend-downrules for the medically needy (discussed below).Medicaid protection for certain former SSIbeneficiariesFederal law requires all states, including 209(b)states, to provide Medicaid to former SSI beneficiarieswho would, but for increases in their SocialSecurity benefits, continue to be eligible for SSI.Congress passed this provision to ensure thatSocial Security increases, intended to improvepeople’s lives, did not harm this group instead bycausing them to lose Medicaid as well as SSI. Mostof the individuals affected have incomes just marginallyabove the income levels at which theymight qualify for SSI/Medicaid combined benefits.In fact, many persons who could qualify forMedicaid under these provisions do not apply forthe program, most likely because they are notaware of them. Improved understanding of theseprotections may help increase the MedicaidFormer SSI Beneficiary Groups withMedicaid Protection• People who lost SSI when they received automaticcost-of-living adjustments (COLAs) in Social Security(sometimes nicknamed “Pickle people” afterCongressman Pickle, one of the sponsors of theoriginal COLA legislation)• Adult children with disabilities who lose SSI becausethey become entitled to Social Security benefitsbased on a parent’s Social Security entitlement• Individuals ages 60–64 who lose SSI due to receiptof Social Security benefits for widows and widowerswith disabilitiesenrollment of this group.Countable Income or ResourcesThe concept of countable income and resourcesmay seem arcane but is important. Neither SSI norMedicaid determine eligibility by comparing aperson’s total income and resources to the dollarthresholds that apply in the person’s eligibilitycategory. Rather, they count only certain typesand amounts. (This practice has a close counterpartin income tax rules, which exempt certaintypes or amounts of income from taxation andallow certain types or amounts to be deductedfrom otherwise taxable income.) For this reason,an individual can have total income or resourceshigher than the nominal eligibility limits (i.e.,higher than $512 in total income or $2000 in totalresources for SSI) and still qualify for benefits.