That's really weird. Unless they put that in for a failsafe so that a certain population wouldn't abuse getting CI. Point out to Medicaid that you're NOT getting CI b/c you're "upgrading and feel like you need the latest technology" Point out that you do have VERY poor speech perception/ no perception in the ear you want implanted I think that might really help.
Ooooo.... would they pay for new hearing aids? Argue that you can't use a hearing aid in your "deaf" ear.
Have you contacted Let Them Hear? I'm not a HUGE fan of them, but this sounds like a legit case.
Oh you could argue that you're havign a REALLY hard time communicating orally, and you've maxed out totally on hearing aids. I wish i could help you!