This is an appeal from an order reversing the decision of a hearing officer which terminated public assistance and medical assistance to Gordon and Esther Hayman. Subsequent to the hearing in the district court Mr. Hayman passed away and Mrs. Hayman appears on this appeal individually and as an heir of Mr. Hayman.
The Haymans, husband and wife, were elderly persons (71 and 73 years of age, respectively) and in ill health when the Idaho Department of Health and Welfare (herein Department), terminated their old age assistance and medical assistance payments. In 1976 they were notified that their various grants would be terminated because it was determined by the Department that, based upon an increase in federal Social Security benefits they were receiving, no “budget deficit” existed because their income exceeded the maximum level, set by Department regulation. The Hay-mans appealed from this termination of benefits, and, following a hearing, the Department hearing officer affirmed the termination. The Haymans then appealed to the district court, which reversed the decision of the hearing officer, finding that it was arbitrary, capricious and unreasonable for the Department to omit medical needs from a determination of old age assistance eligibility. The Department appealed to this court.
As stated by the Department, the issue presented by this appeal is whether the Department is required by Idaho Code Title 56, Chapter 2, to provide a “medically needy” program to all aged persons in the state regardless of the level of their income or their eligibility for categorical assistance and whether the Department has acted unreasonably in failing to adopt such a program. The Haymans expand this issue by arguing, as the district court held, that the Department was unreasonable and capricious in not including medical expenses in the computation of eligibility for old age assistance.
*712For the reasons discussed in this opinion, it is the conclusion of this court that the trial court erred in its ruling and that its order must be reversed and the order of the Department’s hearing examiner reinstated.
State and federal matching funds for medical assistance provided by Title XIX of the federal social security act may be dispensed by the states through at least one of two programs. These have come to be known as “categorically needy” and “medically needy” programs. In “medically needy” programs, any person whose income and resources are insufficient to provide necessary medical services is entitled to receive medical assistance. In “categorically needy” programs the person in need of medical assistance must first qualify for one of the four varieties of public assistance, old age assistance, aid to dependent children, aid to the blind, or aid to the disabled. Only then may medical assistance be provided.
In Curtis v. Child, 95 Idaho 63, 501 P.2d 1374 (1972), the court held that Idaho had enacted a “medically needy” program. The statute which the court construed to reach its decision, I.C. § 56-209b, stated that medical assistance was to be available to persons in any of the four categories mentioned above, and also “to such other persons as may be defined under the authority of this act to be medically needy individuals.” Curtis, supra, 95 Idaho at 66, 501 P.2d at 1377. Since the decision in Curtis, 56-209b has been amended. At the time pertinent to this action it reads as follows:
“Medical assistance.—Medical assistance shall be awarded to persons who are recipients of old-age assistance, aid to dependent children, aid to the blind, aid to the permanently and totally disabled, and to such persons as mandated by title XIX of the Social Security Act . [am. 1973, ch. 161 § 2, p. 306]” (Emphasis added.)
Title XIX of the Social Security Act gives States the option of enacting either a medically needy or categorically needy program, Curtis v. Child, supra, 95 Idaho at 64-6, 501 P.2d at 1375—77 (1972). The amendments to I.C. § 56—209, enacted in 1973, have readopted a “categorically needy” program in Idaho and terminated the “medically needy” program. When the Haymans’ old age assistance grant was terminated June 30, 1976, because they no longer had a budget deficit they no longer qualified for medical assistance under I.C. § 56-209b.
In 1976 qualification for old age assistance was governed in part by two Department regulations.1 Regulation 3143 stated that in addition to other prerequisites one was required to have a “budget deficit,” that is, one’s income and resources could not exceed one’s allowable expenses. Regulation 3120 defined those allowable expenses which could be subtracted from income and resources in determining the presence of a budget deficit. Medical expenses were not included. Under this compilation the Haymans did not have a “budget deficit” (despite the fact that they did not have sufficient income and resources to pay their medical bills) and hence were eligible neither for old age assistance, nor, as a consequence, for medical assistance. The question before this court is whether the failure to include medical expenses in the determination of a budget deficit is arbitrary and capricious. I.C. § 67—5215(g)(6).
That the setting of specific requirements for participation in public assistance programs is largely a matter of State prerogative is established both by federal statute and case law. The very language of Title XIX of the social security act states that its purpose is to enable each State to provide medical assistance to its citizens, “as far as practicable under the conditions in such State . . . .” 42 U.S.C. § 1396 (1965), am. Dec. 31, 1973, Pub.L. 93-233, § 13(a)(1), 87 Stat. 960. The United States *713Supreme Court has repeatedly upheld state welfare statutes under attack for failure to reach all conceivable persons in need, noting the “undisputed power” of the states, under the Social Security Act, to “set the level of benefits and the standard of need,” King v. Smith, 392 U.S. 309, 334, 88 S.Ct. 2128, 2142, 20 L.Ed.2d 1118, 1135 (1968), and that “the federal law gives each State great latitude in dispensing its available funds.” Dandridge v. Williams, 397 U.S. 471, 478, 90 S.Ct. 1153, 1158, 25 L.Ed.2d 491, 498 (1970).
This is so because under Title XIX federal funds are provided on a matching basis only, pegged to the level of State expenditure; and the expenditure of State funds is first and foremost a matter of State policy. It is a familiar “concern that the Federal Government not require a state legislature to appropriate more money for welfare purposes than it is willing and able to appropriate.” Dandridge, supra, 397 U.S. at 492, 90 S.Ct. at 1165, 25 L.Ed.2d at 506 (Douglas, J., dissenting).
In Dandridge, supra, the Maryland Aid to Families with Dependent Children program was challenged on constitutional and statutory grounds because it put an upper limit on the amount of aid which could be dispensed under the program per family. As a result families with a large number of children received less aid per child than those with fewer children. Upholding the program, the Court said:
“We do not decide today that the Maryland regulation is wise, that it best fulfills the relevant social and economic objectives that Maryland might ideally espouse, or that a more just and humane system could not be devised. Conflicting claims of morality and intelligence are raised by opponents and proponents of almost every measure, certainly including the one before us. But the intractable economic, social, and even philosophical problems presented by public welfare assistance programs are not the business of this Court. The Constitution may impose certain procedural safeguards upon systems of welfare administration, Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287. But the Constitution does not empower this Court to second-guess state officials charged with the difficult responsibility of allocating limited public welfare funds among the myriad of potential recipients.” 397 U.S. at 487, 90 S.Ct. at 1162-3, 25 L.Ed.2d at 503 (1970).
This great latitude is of course limited by DHW’s duty to promulgate regulations in accord with both the federal act and with State statutes. Nothing in the record suggests that 3120 was in conflict with the Social Security Act. The Act requires each State to submit its plan for public assistance for approval to the Secretary of Health, Education and Welfare. 42 U.S.C. § 1396 (1965). The record indicates that Idaho’s plan, including Regulation 3120, was approved by the Secretary. The Secretary’s approval, while not controlling, is entitled to considerable deference. Dandridge, supra, 397 U.S. at 481-2, 90 S.Ct. at 1159-60, 25 L.Ed.2d at 499-500 (1970); Power Reactor Dev. Co. v. International Union of Electrical, Radio and Mach. Workers, 367 U.S. 396, 408, 81 S.Ct. 1529, 1535, 6 L.Ed.2d 924, 932 (1961).
Regulation 3120 was also consistent with Idaho statutes. I.C. § 56-205 states that eligibility for public assistance shall be “defined by department regulation and subject to the availability of funds.” The legislature thus placed responsibility for the setting of specific standards and limits directly on the Department and stated that one of its primary concerns should be the availability of funds. In addition, I.C. §§ 67-5217-18 provide that all departmental rules and regulations shall be transmitted to the legislature for approval. Regulations of the Department of Health and Welfare were submitted pursuant to I.C. § 67— 5217 by the State Law Librarian to both the Senate and the House of Representatives on January 2, 1976. See House Journal, 1976 Session of the Legislature, for January 9,1976, p. 19; Senate Journal, 1976 Session of the Legislature, for January 6, 1976, pp. 9-10.
The district court entered a finding that the Department’s exclusion of medical ex*714penses in computing a “budget deficit” is arbitrary and capricious, apparently as a matter of perceived “obligations of society to the individual.” However, the regulation was directly responsive to the legislature’s direction to the Department to administer the public assistance program subject to the availability of funds. It would be ideal to alleviate all need. But the plain meaning of I.C. § 56-205 is that some persons who cannot provide for themselves will nonetheless not receive public assistance if there is not enough money available to provide it to them. The legislature clearly meant to base the entitlement to public assistance first on the availability of funds rather than on some absolute standard of need. Like the Maryland program in Dandridge, supra, regulation 3120 may not be perfect, but it is consistent with the pertinent statutes, and it is not the place of this court to substitute its judgment for that of the legislature.
In any case, the termination of the Hay-mans’ old age assistance grant did not mean that medical care was unavailable to them. Under Title 31, Chapters 34 and 35 of the Idaho Code, the Haymans may have been eligible for county assistance. See University of Utah Med. Ctr. v. Bonneville County, 96 Idaho 432, 529 P.2d 1304 (1974).
The judgment of the district court is reversed and the cause remanded with directions to enter a new judgment affirming the decision of the Department of Health and Welfare. No costs allowed.
DONALDSON, C. J., and BAKES, J., concur.. Since 1976 the Department’s regulations have been rephrased, re-numbered and re-ordered, but they appear to contain the same substance. See Department of Health and Welfare, Rules and Regulations 3-1150 to 3-1155 (1979). We will refer to the Rules and Regulations by the numbering system in use at the time this case was commenced.