CANBY, Circuit Judge:
In 1981, Congress enacted the "lump sum" rule that rendered recipients of Aid to Families with Dependent Children ("AFDC") ineligible for AFDC benefits for a period of time after they receive a lump sum of money from outside sources. 42 U.S.C. § 602(a)(17). This appeal challenges Oregon's application of that lump-sum rule to its Medicaid program.
Brenda Smith and her children were receiving AFDC benefits in May of 1989. During that...
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