Table 2: Countable Income Test & Earnings Disregard Policies Used to Determine the Medicaid Eligibility of Families with Children

Table 2 provides information on the "countable income standard" and earnings disregard policies used by each state under its family coverage category to determine the Medicaid eligibility of a family of three. (States' policies on disregarding income from sources other than earnings and on disregarding selected expenses are explored in subsequent tables.) The "countable income standard" refers to the income level against which a family's monthly income is compared after deductions and disregards are taken into account in order to determine eligibility for Medicaid. Most states also have a gross income test that requires a family's income before deductions and disregards are taken into account to fall below a certain income level (see Table 3 for details).

Column 1: Column 1 shows the income level against which a family's monthly income is compared after deductions and disregards are taken into account in order to determine eligibility for Medicaid (i.e., the "countable income standard"). In states that have adopted an across-the-board income disregard that effectively increases the countable income standard for all families with children, the table displays the effective countable income standard that applies after the disregard is taken into account.

For example, the District of Columbia disregards all income between its July 16, 2023 AFDC income level and 200 percent of poverty. Thus, the District of Columbia is shown in column 1 to have a countable income standard of $2,275, an amount equal to 200 percent of the poverty level for a family of three.

When the countable income standard varies within a state, column 1 displays the standard that applies in the sub-state area with the largest number of Medicaid beneficiaries.

Column 2: Column 2 shows the earnings disregard policy that each state uses for families applying for Medicaid coverage (as opposed to families already enrolled in Medicaid). In this context, states typically define "applicants" as families who are not currently enrolled in Medicaid, and who have not been enrolled within the previous four months.

Column 3: Column 3 shows how each state treats the earnings of recipients who have been enrolled in Medicaid for 12 months or more. Note that a number of states have earnings disregard policies that vary depending on the length of time that a family has been enrolled in Medicaid, or that the adult in the family has been working. For example, states typically disregard $30 and 1/3 of remaining earnings during the first four months that a parent is employed. After four months, the disregard is scaled back. Table 2 does not attempt to capture all of these changes in state earnings disregard policies over time. Instead, it shows the policy that applies at the point of application (column 2), as well as the policy that applies to someone who has been enrolled in Medicaid for 12 months or more (column 3).

Unless otherwise noted, Table 2 presents information on the eligibility rules used by a state under its family coverage category. States marked with an "*" have not yet established such a category, but instead cover families with children not on welfare through a medically needy category. States marked with a "**" also have not established such a category, but instead cover such families under an 1115 waiver expansion. In these cases, Table 2 reflects the policies used by the state to determine the eligibility of families with children under its medically needy category or 1115 waiver rules.

NOTES

1. As of March 1, 2000, California will increase its effective countable income standard to 100 percent of the federal poverty level ($1,157 a month for a family of three in 1999). For applicants, the state will use the new effective countable income standard and a $90 work expense disregard. For recipients, the state will apply the new effective countable income standard and a $90 work expense or the old effective countable income standard ($775 a month for a family of three) and earnings disregard policy ($240 + 50 percent of remaining earnings), whichever is more advantageous to the recipient.
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2. Connecticut is planning to increase its effective countable income standard to 185 percent of the federal poverty level ($2,140 a month for a family of three in 1999) on July 1, 2000.
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3. On July 1, 2000, Ohio will give families the opportunity to be eligible for coverage for a two-year period if their countable incomes fall below 100 percent of the federal poverty level. After families use their two years of coverage at the 100 percent effective countable income standard, they will continue to be eligible for regular Medicaid if they meet the eligibility rules presented in these tables.
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4. South Dakota uses only a gross income test to determine whether families with children are eligible for Medicaid. Thus, a family of three is eligible for Medicaid if its gross income (i.e., income not adjusted by deductions or disregards) falls below $796 a month.
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