400.04.01 COST OF LIVING (COL) ELIGIBILITY CRITERIA (COE-093)

Effective July 1, 1977, Medicaid eligibility was protected for SSI recipients who lost SSI eligibility because of title II cost of living adjustments. Under section 503 of Public Law 94-566, the “Pickle Amendment,” title II beneficiaries who would continue to receive SSI payments but for their title II cost of living increase(s) continue to be considered SSI recipients for Medicaid purposes. The reason for the SSI termination is not a factor in determining whether an individual is entitled to Medicaid coverage as a COL recipient. To be eligible under the COL coverage group, the individual must meet all of the following criteria: • The individual must be currently eligible for title II (Social Security) benefits. • The individual must have been simultaneously eligible for and received both title II and SSI benefits at some time after April 1977. • The individual must have lost SSI eligibility at any point after April 1977; and, • The individual must be currently eligible for SSI on all factors (non-financial and financial) after deducting from countable income the title II cost of living increase(s) received since the last month of simultaneous eligibility for and receipt of SSI (referred to as the COL disregard). If an SSI recipient, who receives both SSI and title II (Social Security benefits), loses eligibility for SSI following a cost-of-living increase in title II benefits, the individual must apply separately for Medicaid. The SSI Medicaid termination notice issued to the former SSI recipient informs the individual of the need to apply for Medicaid under this provision and provides the appropriate Regional Medicaid Office name, address and phone number. Once an application is filed, it is up to the Specialist to determine the possibility of Medicaid eligibility under the COL provision. Although an individual may qualify for ABD in an alternate COE, such as the Healthier MS Waiver program (for non-Medicare applicants) or a Medicare cost-sharing group (for Medicare-eligible recipients), it is important to evaluate the possibility of COL eligibility as it provides full-service coverage in a mandatory coverage group that may mean more permanent coverage since Medicare entitlement is not an issue and income is “frozen” at the amount when SSI stopped with all subsequent cost of living increases disregarded as income. To evaluate the possibility of COE coverage, take the following action: • Verify the SSI termination date, by viewing the recipients notice of termination or confirming the termination date on the SDX, • Review the individual’s payment status code on the SDX. An SSI recipient who goes from C01 (current pay) to E01 (eligible but not receiving SSI) may indicate a possible COL individual. • Determine the COL disregard amount or the aggregate COL increase amount since SSI terminated. o Individuals usually apply for Medicaid-only upon being terminated from SSI. If the former SSI recipient is placed in another COE (such as the Healthier MS Waiver) when he/she should have been placed in COL coverage, the SSI termination date could be after several COL increases have occurred. o Divide the current title II benefit amount by the percentage amount of the previous year’s COL increase. This will provide the individual’s title II benefit level prior to the most recent COL increase. o Repeat this computation for each title II increase received after the former SSI recipient lost SSI. Do not round down. Use the actual amount calculated for each preceding year. o When the last computation is completed, the result is the title II benefit amount when SSI was terminated. Subtract this amount from the current title II benefit amount. The difference is the potential COL disregard amount. If the individual would be below the current individual SSI FBR amount, the individual is potentially eligible as a COL. NOTE: If a couple applies and both are former SSI recipients, both are entitled to a COL disregard, computed as described above and combined to determine eligibility under the current couple SSI FBR. An ineligible spouse’s cost of living increase(s) will also be disregarded for the same time period and applied to the eligible spouse’s disregard; however, this will not result in eligibility for the ineligible spouse unless he/she also meets all COL eligibility criteria. The same is true of a parent or parents whose title II income is deemed to an eligible child or children, i.e., the parent(s) title II cost of living increase(s) are disregarded beginning with the date the child was terminated from SSI. • All COL applications must be referred to the Central Office for review prior to approval. Central Office staff will determine the COL disregard, if needed. Most SSI recipients lose SSI when their title II benefits begin because their title II (plus any other income) places the SSI recipient over the SSI income limit. SSI is the safety net for low income aged, blind and disabled individuals who are in their 6-month waiting period for title II to begin. However, in such a situation, the loss of SSI does not confer COL entitlement. A COL individual must have been eligible for and receiving both title II and SSI in at least one month prior to SSI termination. The individual may also receive other income as well as SSI and title II (such as a pension or other income). However, the requirement must be met that the former SSI recipient received both SSI and title II in at least one month prior to SSI terminating, and the aggregate COL increases that can be disregarded as income must be sufficient to place the individual (or couple) below the appropriate current SSI FBR, thus the former SSI recipient is eligible for SSI “but for” the cost of living increase(s) in title II received since SSI terminated. Required Annual Review of SSI Termination for 3-Consecutive Years The Social Security Administration informs all States annually via electronic files about potential members of the COL group at the time annual cost of living increases in Social Security benefits are awarded. As a result of a federal court case known as Lynch vs. Rank, each state is required to issue a notice to individuals on the file advising them of the Pickle Amendment. Individuals on the list must be notified for 3- consecutive years after SSI terminated, unless they are currently eligible for Medicaid. The electronic file is lead information for the Medicaid agency; it does not confer COL entitlement on the individual on the list. (Electronic files identifying potential COL recipients sent to states by SSA are referred to as C-Save files or Lynch vs. Rank files.) A copy of each letter issued is available in Reports On-Line entitled RB 218, CSAVE Annual Notice Letters.