Medicaid medically needy: the couple limit applies even when SSI deems no spouse income #10507

Problem

is_medically_needy_for_medicaid applies the couple income and asset limits whenever a person's marital unit has two people (#10370). The income it tests is the marital-unit sum of ssi_countable_income, which holds an ineligible spouse's income only when SSI deems it. Below the deeming threshold the spouse contributes nothing, yet the couple limit still applies.

• 20 CFR 416.1163(d)(1): when the ineligible spouse's income is not more than the difference between the couple and individual benefit rates, "there is no income to deem", and SSI uses the individual rate.
• 130 CMR 520.002(A)(1): Massachusetts compares "the total countable-income amount and countable assets of the individual and the spouse who are living together" with the couple standard.

So the model mixes the two methods: SSI's deeming for income, and the couple standard for the limit.

Example

An aged person in Massachusetts in 2026 with $20,000 of Social Security ($19,760 countable) and $13,000 of medical expenses, whose spouse, not aged, blind or disabled, earns $4,800 a year (below the deeming threshold):

• Separate filers on main (tax unit, individual limit): 19,760 - 13,000 = 6,760 > 6,264, ineligible.
• After Count blind people and use the individual or couple in the Medicaid medically needy test #10370 (marital unit, couple limit, no deemed income): 6,760 <= 7,800, eligible.
• Joint filers are eligible on both.

The couple-minus-individual gap in the monthly medically needy income standards is up to $391 (New York); it is $128 in Massachusetts and 0 in 7 states.

Proposed fix

Choose by state method:

• in states that follow SSI methodology for the couple, apply the couple limit only when SSI deeming applies (the spouse's income is above the 416.1163(d) threshold) and otherwise test the individual against the individual limit;
• in states that budget the couple together (as Massachusetts does), count the spouse's full countable income against the couple limit.

This needs a state parameter for the budgeting method. The optional aged, blind and disabled pathway (is_optional_senior_or_disabled_income_eligible) has the same structure and should follow the same rule.

Related

• Count blind people and use the individual or couple in the Medicaid medically needy test #10370 (marital-unit test), Update Medicaid medically needy limits and switch on AR, IA, IL, NJ and ND #10374 (medically needy limits), Medicaid medically needy test sums income and resources over the tax unit instead of the individual or couple #10367.
• Encode the Medicaid medically needy financial unit for aged, blind and disabled applicants (42 CFR 435.602(a)(2)(i), 435.831, 435.845; 20 CFR 416.1202(b)) (PE-US PR 10370) TheAxiomFoundation/rulespec-us#1931 (interpretation 4).