Cite as: 538 U. S. 644 (2003)
Opinion of the Court
provide coverage for the "categorically needy" 4 and, at the State's option, may also cover the "medically needy." 5
Prior to 1990, the Medicaid statute did not specifically address outpatient prescription drug coverage. The Secretary's regulations and guidelines "set upper limits on each State's aggregate expenditures for drugs." 6 Under plans approved by the Secretary, some States designed and administered their own formularies, listing the drugs that they would cover. States also employed "prior authorization programs" that required approval by a state agency to qualify a doctor's prescription for reimbursement. See, e. g., Dodson v. Parham, 427 F. Supp. 97, 100-101 (ND Ga. 1977) ("Georgia has historically administered its prescription drug program on the basis of a drug 'formulary' or, in other words, a restricted list of drugs for which Medicaid will reimburse provider pharmacists. Thus, any drug not specifically included on the list will not be reimbursed unless prior approval is granted by [the administrator of Georgia Medicaid program]"); Cowan v. Myers, 187 Cal. App. 3d 968, 974-975, 232 Cal. Rptr. 299, 301-303 (1986) (describing 1982 California law providing that certain drugs would be covered under
4 The "categorically needy" groups include individuals eligible for cash benefits under the Aid to Families with Dependent Children (AFDC) program, the aged, blind, or disabled individuals who qualify for supplemental security income (SSI) benefits, and other low-income groups such as pregnant women and children entitled to poverty-related coverage. § 1396a(a)(10)(A)(i).
5 The "medically needy" are individuals who meet the nonfinancial eligibility requirements for inclusion in one of the groups covered under Medicaid, but whose income or resources exceed the financial eligibility requirements for categorically needy eligibility. § 1396a(a)(10)(C). Individuals are typically "entitled to medically needy protection when their income and resources, after deducting incurred medical expenses, falls [sic] below the medically needy standards." House Subcommittee on Health and the Environment of the Committee on Energy and Commerce, Medicaid Source Book: Background Data and Analysis, 103d Cong., 1st Sess., 167 (Comm. Print 1993).
6 Ford, at CRS-1.
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