We propose to revise current Medicaid rules for determining the financial eligibility and the level of Medicaid payments for institutional care of aged, blind, and disabled categorically needy individuals when one spouse is institutionalized and the other spouse is not. We propose to reinstate the rules that were in effect prior to the court orders in the Gray Panthers litigation. The change would affect those States that, as permitted by statute, use more restrictive eligibility criteria than those applied nationally under the Supplemental Security Income (SSI) program. It would also apply in Puerto Rico, Guam, and the Virgin Islands. These amendments would revise the regulations permitting these jurisdictions, in situations where one spouse is institutionalized, to consider a portion of the income of one spouse as available to the other spouse whether or not the income is actually contributed.