Reduction in Supplemental Security Income (SSI) Payable to Institutionalized Children Whose Medical Costs Are Covered by Private Insurance

SOCIAL SECURITY ADMINISTRATION

20 CFR Part 416

[Regulation No. 16]

RIN 0960-AE61

Reduction in Supplemental Security Income (SSI) Payable to

Institutionalized Children Whose Medical Costs Are Covered by Private

Insurance

AGENCY: Social Security Administration.

ACTION: Final rules.

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SUMMARY: The interim final rules published at 62 FR 1053, on January 8,

1997, are adopted as final without change. These rules implement an

amendment to section 1611(e)(1)(B) of the Social Security Act (the Act)

made by section 214 of Pub. L. 104-193, the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996.

DATES: These rules are effective beginning January 8, 1997.

FOR FURTHER INFORMATION CONTACT: Daniel T. Bridgewater, Legal

Assistant, Division of Regulations and Rulings, Social Security

Administration, 6401 Security Boulevard, Baltimore, MD 21235, (410)

965-3298 for information about these rules. For information on

eligibility or claiming benefits, call our national toll-free number,

1-800-772-1213.

SUPPLEMENTARY INFORMATION:

Background

Section 1611(e)(1)(A) of the Act generally precludes eligibility

for SSI benefits when a claimant is a resident of a public institution

throughout a month. However, section 1611(e)(1)(B) provided an

exception to that bar. Under that section, payments could be made at

the reduced Federal benefit rate to individuals in institutions

``receiving payments (with respect to such individual or spouse) under

a State plan approved under title XIX * * *'' This language was

implemented through regulations to mean that individuals in

institutions would receive only the reduced benefit amount when

``Medicaid (title XIX of the Social Security Act) pays a substantial

part (more than 50 percent) of the cost of'' the claimant's care

(Sec. 416.211(b)).

Section 214 of Pub. L. 104-193, effective for benefits beginning

with the month of December 1996, amends section 1611(e)(1)(B) of the

Act by extending applicability of the reduced SSI benefit rate to

children under age 18 in medical care facilities receiving payments on

their behalf under a health insurance policy issued by a private

provider (hereinafter referred to as private health insurance). Prior

to the enactment of section 214, children under the age of 18 in

private institutions with private health insurance generally could be

eligible for a full SSI payment. Section 214 now restricts the SSI

payment for such children to the Federal reduced benefit rate. Also,

prior to this legislation, individuals in public institutions not

receiving substantial Medicaid payments on their behalf generally were

ineligible for SSI. However, as a result of this legislation, children

under age 18 in public institutions receiving private health insurance

on their behalf now are eligible for SSI payments at the reduced

Federal benefit amount.

The final rules apply the reduced Federal benefit amount to

children under age 18 with private health insurance when it, either

alone or in combination with Medicaid, pays a substantial part (more

than 50 percent) of the cost of their care in the institution.

Regulatory Changes

During the public comment period, we received two comments within

the scope of this rulemaking. One commenter, representing a major

advocacy group for retarded citizens, expressed agreement with the

Social Security Administration's interpretation of the provision

regarding the amount of private insurance payments required in order

for the reduced Federal SSI benefit rate to apply. Another commenter

asked that we add a clarification specifying that Health Maintenance

Organizations (HMOs) are

[[Page 42412]]

considered to be private health insurance providers within the meaning

of this provision. However, the constantly evolving variety of

innovative funding sources for institutional care precludes any attempt

to specifically address each possible situation in these regulations.

Our administrative issuances provide guidance to adjudicators in

determining whether particular HMOs, or other kinds of insurers, may or

may not be considered private health insurance providers. We also

received several other comments, but they were not within the scope of

this rulemaking.

Therefore, the interim final rules are adopted as final without

change.

Dated: July 28, 1997.

John J. Callahan,

Acting Commissioner for Social Security.

PART 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND

DISABLED

Accordingly, the interim final rules amending 20 CFR part 416 which

were published at 62 FR 1053 on January 8, 1997, are adopted as final

without change.

[FR Doc. 97-20741 Filed 8-6-97; 8:45 am]

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