Low Income Elderly and Disabled Medicaid Amendments of 1986 - Title I: Optional Coverage of Elderly and Disabled Poor for All Medicaid Benefits - Amends title XIX (Medicaid) of the Social Security Act to give States the option of extending Medicaid coverage to elderly and disabled individuals whose income is too high for them to qualify for Medicaid under current income tests, but does not exceed a State maximum income level to be established at or below the Federal poverty level. Requires States providing coverage under this Act to provide Medicaid coverage, pursuant to the Medicaid Infant Mortality Amendments of 1986, to pregnant women and infants whose income does not exceed the State maximum income level. Title II: Optional Coverage of Poor Medicare Beneficiaries for Medicare Cost-Sharing Expenses - Authorizes the States to provide Medicaid coverage for Medicare (title XVIII of the Act) premiums, deductibles, and coinsurance payments for which Medicare-eligible individuals whose income does not exceed the State maximum income level would otherwise be accountable.