(2) Changes in an Individual's Status as a Specified Excluded Individual

States will also encounter instances in which an individual who was previously determined to be a specified excluded individual loses that status during their eligibility period. The change in status may be identified outside of the regularly scheduled renewal process and could be a beneficiary-reported change in status, a change identified by the State, or an anticipated change, such as when a ( printed page 33392) parent's dependent child turns age 14, causing the parent to no longer be a specified excluded individual on the basis of being the parent of a dependent child as defined at § 435.554(a). Unless the individual is a specified excluded individual on another basis specified at § 435.554, the individual becomes an applicable individual who is subject to the community engagement requirement.

As with the case of someone previously enrolled in an eligibility group or section 1115 demonstration not subject to community engagement newly becoming an applicable individual, when a State determines that an individual is no longer a specified excluded individual and has become an applicable individual, the State must ensure the individual demonstrates community engagement or is deemed to have demonstrated community engagement during the period specified at § 435.556(a)(2)(iii). In assessing compliance within this review period, a State must consider an applicable individual compliant with the community engagement requirement if they demonstrated or are deemed to have demonstrated community engagement for the lesser of the number of months the State elects under § 435.556(a)(2) or, consistent with the requirement in § 435.556(b), the number of months in the review period.

It is important to note that having been a specified excluded individual is a mandatory exception, as specified at § 435.553(a)(4), that results in the applicable individual being deemed to have demonstrated community engagement in a month for which the applicable individual was a specified excluded individual for all or part of the month. As such, the State must deem an applicable individual to have demonstrated community engagement in all month(s) of the review period in which they were a specified excluded individual. Because of this deeming, in most cases, a person will continue to be eligible for Medicaid at the time they lose their status as a specified excluded individual.