Title 42, The Public Health and WelfareRelease 119-73not60
§1396u–1 Assuring Coverage for Certain Low-income Families
Title 42 › Chapter 7— SOCIAL SECURITY › Subchapter XIX— GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS › § 1396u–1
Summary
It requires states to use the Medicaid income, resource, eligibility rules, and counting methods that were in effect on July 16, 1996 when deciding who qualifies for medical assistance. A state may lower its income limits but not below the levels it had on May 1, 1988. After July 16, 1996 a state may raise income or resource limits only by the same percentage as the Consumer Price Index (CPI‑U) increase. A state may also use less strict ways of counting income or resources. If someone loses cash help for refusing to work, the state may end their Medicaid in the same way, but it may not cut off medical help for a minor child who is not the head of the household. Rules that let people keep Medicaid after losing cash aid still apply the way they did on July 16, 1996, and there are special rules for people who would lose Medicaid because of work hours or earnings. Waivers of the old rules that were in place on July 16, 1996, or that were sent to the federal government before August 22, 1996 and approved by July 1, 1997, can keep being used after they would normally end if the state chooses. States can use one application form for both cash help and Medicaid. The federal government may pay a higher share of extra paperwork costs caused by these rules, but total extra federal payments starting in fiscal year 1997 are capped at $500,000,000 and must be shared fairly among states. Definitions: "welfare reform effective date" means the start date for Title I of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 as set in section 116 of that Act.
Full Legal Text
Title 42, §1396u–1
The Public Health and Welfare, Source: USLM XML via OLRC
(a)Subject to the succeeding provisions of this section, with respect to a State any reference in this subchapter (or any other provision of law in relation to the operation of this subchapter) to a provision of part A of subchapter IV, or a State plan under such part (or a provision of such a plan), including income and resource standards and income and resource methodologies under such part or plan, shall be considered a reference to such a provision or plan as in effect as of July 16, 1996, with respect to the State.
(b)(1)For purposes of this subchapter, subject to paragraphs (2) and (3), in determining eligibility for medical assistance—
(A)an individual shall be treated as receiving aid or assistance under a State plan approved under part A of subchapter IV only if the individual meets—
(i)the income and resource standards for determining eligibility under such plan, and
(ii)the eligibility requirements of such plan under subsections (a) through (c) of section 606 of this title and section 607(a) of this title,
(B)the income and resource methodologies under such plan as of such date shall be used in the determination of whether any individual meets income and resource standards under such plan.
(2)For purposes of applying this section, a State—
(A)may lower its income standards applicable with respect to part A of subchapter IV, but not below the income standards applicable under its State plan under such part on May 1, 1988;
(B)may increase income or resource standards under the State plan referred to in paragraph (1) over a period (beginning after July 16, 1996) by a percentage that does not exceed the percentage increase in the Consumer Price Index for all urban consumers (all items; United States city average) over such period; and
(C)may use income and resource methodologies that are less restrictive than the methodologies used under the State plan under such part as of July 16, 1996.
(3)(A)In the case of an individual who—
(i)is receiving cash assistance under a State program funded under part A of subchapter IV,
(ii)is eligible for medical assistance under this subchapter on a basis not related to section 1396a(l) of this title, and
(iii)has the cash assistance under such program terminated pursuant to section 607(e)(1)(B) of this title (as in effect on or after the welfare reform effective date) because of refusing to work,
(B)Subparagraph (A) shall not be construed as permitting a State to terminate medical assistance for a minor child who is not the head of a household receiving assistance under a State program funded under part A of subchapter IV.
(c)(1)The provisions of section 606(h) of this title (as in effect on July 16, 1996) shall apply, in relation to this subchapter, with respect to individuals (and families composed of individuals) who are described in subsection (b)(1)(A), in the same manner as they applied before such date with respect to individuals who became ineligible for aid to families with dependent children as a result (wholly or partly) of the collection of child or spousal support under part D of subchapter IV.
(2)For continued medical assistance in the case of individuals (and families composed of individuals) described in subsection (b)(1)(A) who would otherwise become ineligible because of hours or income from employment, see section 1396r–6 and 1396a(e)(1) of this title.
(d)In the case of a waiver of a provision of part A of subchapter IV in effect with respect to a State as of July 16, 1996, or which is submitted to the Secretary before August 22, 1996, and approved by the Secretary on or before July 1, 1997, if the waiver affects eligibility of individuals for medical assistance under this subchapter, such waiver may (but need not) continue to be applied, at the option of the State, in relation to this subchapter after the date the waiver would otherwise expire.
(e)Nothing in this section, or part A of subchapter IV, shall be construed as preventing a State from providing for the same application form for assistance under a State program funded under part A of subchapter IV (on or after the welfare reform effective date) and for medical assistance under this subchapter.
(f)(1)With respect to the reference in section 1396a(a)(5) of this title to a State plan approved under part A of subchapter IV, a State may treat such reference as a reference either to a State program funded under such part (as in effect on and after the welfare reform effective date) or to the State plan under this subchapter.
(2)Any reference in section 1396a(a)(55) of this title to a State plan approved under part A of subchapter IV shall be deemed a reference to a State program funded under such part.
(3)In applying section 1396b(f) of this title, the applicable income limitation otherwise determined shall be subject to increase in the same manner as income or resource standards of a State may be increased under subsection (b)(2)(B).
(g)The provisions of this section shall apply notwithstanding any other provision of this chapter.
(h)(1)Subject to the succeeding provisions of this subsection, the Secretary shall provide that with respect to administrative expenditures described in paragraph (2) the per centum specified in section 1396b(a)(7) of this title shall be increased to such percentage as the Secretary specifies.
(2)The administrative expenditures described in this paragraph are expenditures described in section 1396b(a)(7) of this title that a State demonstrates to the satisfaction of the Secretary are attributable to administrative costs of eligibility determinations that (but for the enactment of this section) would not be incurred.
(3)The total amount of additional Federal funds that are expended as a result of the application of this subsection for the period beginning with fiscal year 1997 shall not exceed $500,000,000. In applying this paragraph, the Secretary shall ensure the equitable distribution of additional funds among the States.
(i)In this section, the term “welfare reform effective date” means the effective date, with respect to a State, of title I of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (as specified in section 116 of such Act).
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
For
Effective Date
, with respect to a State, of title I of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (as specified in section 116 of such Act), referred to in subsec. (i), see section 116 of Pub. L. 104–193, set out as an
Effective Date
note under section 601 of this title.
Prior Provisions
A prior section 1931 of act Aug. 14, 1935, was renumbered section 1939 and is classified to section 1396v of this title.
Amendments
1999—Subsec. (h)(3). Pub. L. 106–113, § 1000(a)(6) [title VI, § 602(a)(1)], struck out “and ending with fiscal year 2000” after “fiscal year 1997”. Subsec. (h)(4). Pub. L. 106–113, § 1000(a)(6) [title VI, § 602(a)(2)], struck out heading and text of par. (4). Prior to amendment, text read as follows: “This subsection shall only apply with respect to a State for expenditures incurred during the first 12 calendar quarters in which the State program funded under part A of subchapter IV of this chapter (as in effect on and after the welfare reform
Effective Date
) is in effect.”
Statutory Notes and Related Subsidiaries
Effective Date
of 1999 Amendment Pub. L. 106–113, div. B, § 1000(a)(6) [title VI, § 602(b)], Nov. 29, 1999, 113 Stat. 1536, 1501A–394, provided that: “The
Amendments
made by this section [amending this section] shall take effect as if included in the enactment of section 114 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104–193; 110 Stat. 2177).”
Effective Date
Section effective July 1, 1997, with transition rules relating to State options to accelerate such date, rules relating to claims, actions, and proceedings commenced before such date, rules relating to closing out of accounts for terminated or substantially modified programs and continuance in office of Assistant Secretary for Family Support, and provisions relating to termination of entitlement under AFDC program, see section 116 of Pub. L. 104–193, as amended, set out as a note under section 601 of this title.
Reference
Citations & Metadata
Citation
42 U.S.C. § 1396u–1
Title 42, The Public Health and Welfare
Last Updated
Apr 5, 2026
Release point: 119-73not60