a. Definition of Caretaker Relative

Current CMS regulations define a caretaker relative at § 435.4. The “caretaker relative” definition generally implements section 1905(a)(ii) of the Act (“relatives specified in section 406(b)(1) with whom a child is living if such child is (or would, if needy, be) a dependent child under part A of title IV.”). Such references to title IV-A of the Act are to the former Aid to Families with Dependent Children (AFDC) program, as it existed on July 16, 1996. AFDC was replaced with the TANF block grant by PRWORA. In de-linking receipt of cash assistance from Medicaid, PRWORA also established categorical eligibility for low-income families under section 1931 of the Act. The definition of caretaker relative is used for the population of categorically needy parents and other caretaker relatives that is now implemented in regulations at § 435.110. Section 435.4 defines a caretaker relative as a parent or other relative (related by blood, adoption, or marriage) living with a dependent child, who assumes primary responsibility for the dependent child's care. Section 435.4 specifies who qualifies as a relative for such purposes, and includes a child's father, mother, grandfather, grandmother, brother, sister, stepfather, stepmother, stepbrother, stepsister, aunt, uncle, first cousin, nephew, niece, or the spouse of such parent or relative, even after the marriage is terminated by death or divorce. The definition also provides States the option to include other adults: additional relatives of the child by blood (including those of half-blood), adoption, or marriage; a domestic partner of the parent or other caretaker relative; or any adult with whom the child is living and who assumes primary responsibility for the child's care.

Use of the term “caretaker relative” in our regulations describes a specific relationship with a child that defines the categorical Medicaid eligibility group at § 435.110. [ 47 ] Because States have experience implementing the § 435.110 eligibility group and associated policies based on the existing definition in § 435.4, we believe it is appropriate to align the definition of “caretaker relative” in section 1902(xx)(9)(A)(ii)(II) of the Act with that definition. However, we acknowledge that, in addition to a dependent child age 13 or under, the exclusion also applies to caretaker relatives of a “disabled individual” (defined later in this section). Therefore, if we were to use the existing definition at § 435.4 without any changes, the definition would not align with the exclusion in ( printed page 33367) the statute. As such, for purposes of this exclusion from the community engagement requirement, at a new § 435.554(a) we establish a definition of caretaker relative, based on the relationships listed in the existing definition at § 435.4, to apply the definition to caretaker relatives of both dependent children and disabled individuals, as established in section 1902(xx)(9)(A)(ii)(III) of the Act. We also specify additional relationships (husband, wife, son, daughter, stepson, stepdaughter, grandson, granddaughter) under which individuals could qualify as a caretaker relative of a disabled individual (these additional relationships are not relevant for dependent children age 13 and under because of their age). Like the definition in § 435.4, the new definition requires that the caretaker relative assume primary responsibility for the dependent child's or disabled individual's care and live with the dependent child or disabled individual who is receiving the care.

If a State has elected to expand the definition of “caretaker relative” to additional relatives under paragraph (3) of the caretaker relative definition at § 435.4, the State must apply the same elections when determining whether an individual is a “caretaker relative” of a dependent child or a disabled individual for purposes of the exclusion described at section 1902(xx)(9)(A)(ii)(III) of the Act. We believe that aligning the elections of additional relatives across the eligibility group for parents and other caretaker relatives at § 435.110 and this community engagement exclusion would prevent beneficiary confusion and potential disruption of coverage for certain caretakers who transition between the parent and caretaker relative group and a group consisting of applicable individuals. We also believe alignment will create administrative simplicity for States and better understanding of the policy for beneficiaries.

For example, suppose a beneficiary is the second cousin of, and lives with, a 10-year-old child who is dependent on the beneficiary for care. Because their State elected the option under paragraph (3) of the caretaker relative definition at § 435.4, the beneficiary is eligible for the “parents and other caretaker relatives” eligibility group. The beneficiary subsequently experiences an increase in unearned income and is determined ineligible for the “parents and other caretaker relatives” group and is then determined eligible for the adult group. If the State uses a consistent definition of relationships for caretaker relative, the State would determine the individual to be a specified excluded individual under the exclusion described at section 1902(xx)(9)(A)(ii)(III) of the Act. The beneficiary would not be subject to the community engagement requirement, and the State would not need to determine whether the individual demonstrated compliance, which is consistent with the beneficiary's previous status as a caretaker relative. However, if the State used a different relationship election for the exclusion, the State would need to conduct a separate analysis of the relationship between the adult and the dependent child, adding to the complexity of the redetermination process for the State and potentially resulting in confusion or a disruption of coverage for the caretaker relative.