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But your MLTC plan can end your enrollment in that particular plan if you do not pay your spenddown. If you pay for six months of coverage, you will have Medicaid coverage for all outpatient and inpatient services for the next 6 months.*. The median personal needs allowance for an individual residing in an institution is $50 per month (Appendix Table 7). Virginia requires individuals to have income at or below 80% FPL ($809/month for an individual in 2018)39 to become eligible in this pathway, but once enrolled, individuals can have earnings up to $75,000 per year ($6,250 per month) as long as they are deposited into a qualifying account. And because no one knows the future, you'll want to implement these strategies sooner rather than later. Earlier in this article, we discussed selling an old car and spending the proceeds from the sale and cash from a bank account to buy a new car. Allowing Section 2404 to expire could slow or begin to reverse states progress in expanding access to HCBS, while extending Section 2404 would provide stability for states and enrollees receiving HCBS. Setting up and maintaining an SNT is not free. Medigap policies generally do not cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing. Congress created the spousal impoverishment rules in 1988 to protect a portion of a married couples income and assets and ensure that the community spouse is able to meet their living expenses when the other spouse seeks Medicaid LTSS. Medicaid Eligibility | Medicaid The American Council on Aging website offers a free service with a list of spend-down tactics and links to find planners. The Katie Beckett pathway requires the child to meet both SSI medical disability criteria and an institutional level of care, while the FOA pathway only requires SSI medical disability criteria. You may also consider a MSP in combination with a Medigap or Medicare Advantage plan. These states include Alabama, Arizona, Connecticut, Delaware, DC, Mississippi, New York, Oregon, and Vermont, with Oregon joining this group in 2016. What are Medicaid Long-Term Services and Supports? It could be a situation where someone thought they could live alone for the next 10 years, but they have a fall and break a hip. Second, you have no proof of what you sold the sailboat for. Box 3: Legislation to Create a Katie Beckett Waiver Program in Tennessee, Tennessee is the only state that does not report covering Katie Beckett children through the state plan option or a comparable waiver in 2018. Finally, because each state will have its own rules on Medicaid spend down, it might be worth talking to an estate planning and/or elder law attorney to figure out exactly what you need to do to prepare for your financial future under Medicaid. Unlike the Katie Becket pathway which only considers the childs own income, the FOA option considers household income. To do this, you'll need to meet certain conditions. This will make your penalty period even longer. While a bill for a non-Medicaid-covered service will help you meet your monthly spenddown, Medicaid will not cover the bill. Medicaid Enrollment - Cabinet for Health and Family Services What Is Medicaid Spend Down? The other 14 states have more generous medically needy asset limits for individuals and couples (DC, FL, IA, MN, NE, NH, NJ, NY, ND, PA, and RI), only for individuals (MD), or only for couples (GA, KY), compared to the SSI limit, ranging from $2,400 for an individual in Pennsylvania to $15,150 in New York. Aside from the Medicaid expansion, the ACA introduced other reforms that simplify and modernize Medicaid eligibility and enrollment processes. Funding appropriation is a joint effort by the states and the federal government. A minority of states (8 of 45) do not have an asset limit for the working people with disabilities pathway (Appendix Table 4). It uses state and federal money to pay for those services. Tim Parker Updated on February 20, 2022 Reviewed by Michael J Boyle Fact checked by Vikki Velasquez Photo: Jeff Topping / Getty Images Medicaid is a needs-based health insurance program that exists to help people with healthcare needs who can't otherwise afford healthcare coverage. For instance, you shouldn't lose Medicaid eligibility for something you sold or gave away 20 years ago. Additionally, states may apply rules that disregard a portion of an individuals income. Consequently, a person may have actual income that exceeds the limit for a certain pathway but still be eligible for Medicaid as a result of disregards that reduce countable income. If your Medicaid spenddown is $100 a month, and you do not need dental, vision, or home care, you are likely better off with a MSP only, rather than paying your monthly spenddown to opt into Medicaid. Arkansas will apply the rules to two of its four waivers.90Illinois plans to scale back application of the rules if Section 2404 is not extended by applying the rules in full to one of nine HCBS waivers and in part (for financial eligibility but not post-eligibility treatment of income) to two waivers.91Minnesota plans to apply the rules to one of five HCBS waivers.92Maine93and New Hampshire do not plan to apply the rules to any HCBS waivers if Congress does not reauthorize ACA Section 2404. Figure 3: Medicaid Eligibility for Seniors and People with Disabilities, 2018. assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come through periodic reviews. This FAQ answers common questions people have about how a Medicaid spenddown works. Other disregards also may apply, depending on the income source. You need to spend it on qualified medical expenses, like health insurance premiums, prescription drugs, eligible medical equipment, doctor's visits and transportation costs to and from your health care provider. Once an individual's incurred expenses exceed the difference between the individual's income and the state's medically needy income level . To spend down, you must spend any money that you have beyond the Medicaid eligibility limits on medical costs that your insurance doesn't cover, such as unpaid hospital bills or installing support bars in your bathroom. The effective SSI income limit is somewhat higher than 74% FPL in four states, due to state supplemental payments and/or additional income disregards: 80% FPL in Idaho, 83% FPL in New York and Wisconsin, and 87% FPL in Missouri (Appendix Table 2). The legislation also calls for a Medicaid diversion plan to be established under Tennessees waiver that would offer a limited benefit package and use Medicaid funds as premium assistance to purchase private coverage for children who meet functional needs criteria and qualify for an institutional level of care or are at risk of doing so. Buy medical items not covered by your health insurance, such as dentures, glasses and hearing devices. Because either type of care can be very expensive, Medicaid is often used to help pay for it. spenddown is similar to an insurance policy deductible. States select a budget period between one and six months during which an individual must incur enough expenses to decrease their income below the medically needy limit. Counted. And when many people apply for Medicaid benefits, it's not something they planned out years in advance. with valuable resources and guidance to develop comprehensive estate plans that take life's contingencies into consideration and leave a positive impact for generations to come. Missouris rules vary by program. Americans spend more than $1,500 per person every year on prescription drugs. A minority of states (8 of 51) elect the Section 209 (b) option to apply Medicaid eligibility rules to SSI beneficiaries that are different from those under the federal SSI program (Appendix Table 2). people who "spend down" to the state's medically needy income . For example, you may only spend $50 a month in out-of-pocket medical costs that Medicare does not cover. Medicaid Spend Down Overview. In the other three states electing this option, the eligibility limit is 80% FPL in Arkansas, 81% FPL in Virginia, and 88% FPL in Florida. For example, if you are due for your dental cleaning in June, you can meet your spenddown in June, and Medicaid would activate for that month. In addition, these categories remain relevant to determining Medicaid eligibility under the medically needy option because beneficiaries who qualify as medically needy must fit into one of the traditional categories. A few states have slightly higher limits ($9,060 for an individual and $14,340 for a couple in CO and NM, and $10,000 for an individual and $18,000 for a couple in MN). Below, we lay out some facts about Medicaid spenddowns, so you can start to understand the process. What Is a Medicaid Spend Down? - ValuePenguin Eventually, there comes a point where we struggle to do the simplest things, such as caring for ourselves. Once you spend this amount, you will have MO HealthNet coverage for the month. The median working people with disabilities income limit was $2,530 per month, or 250% FPL for an individual38 in 2018 (Figure 6 and Appendix Table 4). Spending down is a way to legally bring income and assets in line with eligibility requirements. This is called a Medicaid spenddown. You also might be told you are "over-income" for Medicaid or have "excess income.". UnitedHealthcare Connected for One Care (Medicare-Medicaid Plan) UnitedHealthcare Connected for One Care (Medicare-Medicaid Plan) is a health plan that contracts with both Medicare and MassHealth (Medicaid) to provide benefits of both programs to enrollees. Box 2: Categorically Needy vs. Medically Need Pathways. However, Medicaid will sometimes apply when Medicare doesn't, such as with assisted living services and long-term care assistance. The three states that offer Miller trusts for institutional care but not for HCBS are Alabama, Nevada, and Wyoming. If you have been disenrolled from your plan for failure to pay your spenddown, you will be transferred to another MLTC plan, and your services will continue. Maine reports charging premiums for all Katie Beckett enrollees, which vary on a sliding scale based on income and whether the child also has private health insurance. Over half of Katie Beckett states (29 of 50) cover these children solely through a waiver, under which enrollment can be capped, while about one-third of Katie Beckett states (17 of 50) elect to cover all eligible children under the state plan option (Figure 5 and Appendix Table 1).25 Four states (CO, NE, NY, and RI) cover some Katie Beckett children through the state plan option and others through a comparable waiver. So if you have two cars and donate one to charity or give it away to a relative, the fair market value of the vehicle you gave away or gifted will be considered when it comes to whether or not you meet the financial requirements for Medicaid. When a married Medicaid beneficiary is receiving nursing facility or other institutional LTSS, 14 states allow the spouse remaining in the community to retain $2,05878 in income per month (the federal minimum, 150% FPL for a household of two), and 19 states permit $3,09079 per month (the federal maximum) (Appendix Table 7). In states electing this option, the medically needy pathway can be an important means of expanding coverage for those with overwhelming medical and/or LTSS expenses. However, these methods must all be used outside the five-year look-back period. Income spend down applies when you spend some of your income on eligible expenses to reduce available income for Medicaid eligibility purposes. Let's say you receive $1,000 per month (from Social Security) and your state's Medicaid income limit is $900 per month. Alaska is an outlier with a personal needs allowance of $1,396 per month. This option can enable individuals with relatively small trust amounts to benefit from economies of scale by being part of a larger pool of funds for investment and management purposes. Opens in a new window. This can delay Medicaids coverage for nursing home care if you should ever need it. If you choose a Medicare Advantage plan, you can only see doctors who are in that plans network. When calling the TMHP Contact Center, the following options are available: Option 1: Automatic Transactions Option 2: Provider Inquiries Option 3: Provider Enrollment Almost 85 percent of states (43 of 51) offer a reconsideration period, allowing those in age and disability-related pathways to renew coverage without a new application within a certain period of time after termination (Figure 11 and Appendix Table 9).109 Nine of these states (DC, HI, LA, MO, MT, NM, NC, OK, and WV) newly report that they have adopted this option since our last survey in 2015. By default, Medicaid requires consumers to "spend-down" their income that is above the limit towards the cost of health care before accessing Medicaid benefits - much like a deductible. If you are enrolled in QMB, your Medicare providers cannot charge you Medicare deductibles or cost-sharing for Medicare-covered services. A Medicare Advantage plan may be a good option for you instead of Medicaid with a spenddown if you have needs that are covered by the Medicare Advantage plan and if the out-of-pocket cost for your Medicare Advantage plan is less than your Medicaid spenddown amount. In order to be enrolled in the MSP, you must apply and recertify each year with your LDSS. It includes mandatory and optional pathways to full Medicaid eligibility, options to expand Medicaid eligibility for institutional and home and community-based LTSS, and the Medicare Savings Programs that state Medicaid programs must offer to assist low-income Medicare beneficiaries with out-of-pocket costs. They will then conclude the look-back rule has been violated and apply the appropriate penalty period relating to how long you need to wait to receive Medicaid benefits. Depending on your income, there are 3 different levels of MSP: QMB, SLMB, and QI-1. Medigap policies cover some of the costs Original Medicare does not cover like copayments, coinsurance, and deductibles. by Curtis Lee | Contributor Looking ahead, state and federal policy choices that affect Medicaid eligibility for seniors and people with disabilities will remain important areas to watch. Generally speaking, these exempt assets include: States also vary as to types of property that are exempt from Medicaid financial eligibility determination and any caps on the value of those properties. NYSED::Spend Down Procedures - New York State Education Department Table 1 below outlines key differences in eligibility criteria between these two pathways. How does a spenddown work when I have Managed Long Term Care (MLTC)? December 14, 2022. Certain Medicaid beneficiaries receiving HCBS76 must contribute a portion of their income to their cost of care, although states generally allow them to retain a monthly maintenance needs allowance that exceeds the institutional personal needs allowance described above, recognizing that individuals living in the community must pay for room and board. Unlike waivers, states are not permitted to cap enrollment or maintain a waiting list for Section 1915 (i) HCBS. The Medical Assistance program pays for medical care and treatment the same as private health insurance. Medicaid pathways in which eligibility for full benefits is based on old age or disability include the core group of Supplemental Security Income (SSI) beneficiaries, which all states that choose to participate in Medicaid must cover, and an array of additional groups that can be covered at state option (Figure 2 and Appendix Table 1). Greater shares of states that have adopted the ACA Medicaid expansion also have adopted key optional eligibility pathways based on old age or disability, compared to non-expansion states (Figure 7 and Table 2 below). What Assets Are Exempt From Medicaid Spend Down? (Opens in a new browser tab), Does Medicare Help with Family Caregivers? Aligning financial eligibility rules across long-term care settings is important to eliminating programmatic bias toward institutional care. Medicaid eligibility in these pathways could be affected by a change to the inflation measure that is used to determine the annual federal poverty line, which the federal government is considering.111 Using a lower inflation measure would result in smaller increases in the poverty line each year compared to the current measure, which would slow the annual increase in Medicaid income limits based on the FPL over time, with fewer people eligible for Medicaid as a result. The income limit is $217 and resource limit is $2,000 for an individual. By using this service, you accept the terms of our Visitor Agreement and Privacy Statement. Legacy Assurance Plan. What Assets Are Exempt From Medicaid Spend Down? Asset spend down refers to steps you can take to reduce or eliminate assets that get counted (countable assets) when determining financial eligibility for Medicaid. The reasoning is that had these transactions not occurred, the property could have been used to help pay for long-term care instead of the individual relying on Medicaid. This issue brief presents state-level data on Medicaid financial eligibility criteria5 and adoption of the major coverage pathways related to old age and disability as of 2018. The U.S. net personal savings rate (savings minus borrowing) averaged below 7 percent in the five years before COVID. Nearly all states (47 of 51) have adopted at least one of the ACAs streamlined processes for Medicaid beneficiaries renewing coverage through an age or disability-related pathway, and over 60% (31 of 51) have adopted both options (Figure 11 and Appendix Table 9). Box 2 explains the distinction between categorically and medically needy pathways and provides more detail about establishing eligibility under the medically needy option. These states include Arizona, Arkansas, Colorado, Delaware, DC, Massachusetts, Washington, and Wyoming. The findings are based on a survey of the 50 states and the District of Columbia conducted by the Kaiser Family Foundations Program on Medicaid and the Uninsured in fall 2018.6 The Appendix Tables contain detailed state-level data. (Alabama does cover Katie Beckett children through a waiver; waiver coverage is excluded from this analysis as, unlike state plan coverage groups, waiver enrollment can be capped. Enrollment depends on the plans contract renewal. But remember, if you need Medicaid benefits to help pay for long-term care services before five years pass after their creation, you can expect these estate planning tools to be subjected to the look-back rule. Massachusetts FOA-like waiver does not have an enrollment cap or an income limit.33, Nearly all (5 of 6) states with the FOA option or a comparable waiver choose to charge premiums. Medicaid Financial Eligibility for Seniors and People with - KFF Relatedly, if Congress does not re-authorize ACA Section 2404, which is currently set to expire on September 30, 2019, the spousal impoverishment rules will revert to a state option for HCBS while remaining in place for institutional care. Eliminating asset tests aligns these age and disability-related pathways with newer disability-related pathways (FOA and Section 1915 (i)) that do not have asset tests and with poverty-related pathways, in which asset tests were eliminated by the ACA. To date, ACA Medicaid expansion states generally have not sought to decrease or eliminate eligibility in age and disability-related pathways. The ACA amended Section 1915 (i) to allow states to provide full Medicaid benefits to people who are not otherwise eligible and who meet financial and functional eligibility criteria.41 States can cover (1) people up to 150% FPL with no asset limit who meet functional eligibility criteria; and/or (2) people up to 300% SSI who would be eligible for Medicaid under an existing HCBS waiver. You can also engage in more conventional estate planning tools, such as personal and charitable gifts, creating an irrevocable trust or using a life estate to protect certain types of property, such as a family home. The amount of premium assistance would be determined using a sliding fee scale based on parental income. However, if you no longer wish to participate in an SNT, you can still spend the money already in the SNT on expenses for yourself and stop depositing money into the trust. It works by letting you spend down your income so that you meet Medicaid income limits. Three states (AL, NC, and SC) set their personal needs allowance at the federal minimum of $30 per month. Let's look at a hypothetical to illustrate. Figure 5: Medicaid Eligibility for Katie Beckett Children with Significant Disabilities, 2018. All states except Tennessee opt to provide Medicaid for at least some Katie Beckett children up to age 19 with significant disabilities living at home, without regard to household income (Figure 5 and Appendix Table 1). Spending Down Assets to Qualify for Medicaid - ElderLawAnswers Medicaid and Medicare are different programs. Among the states that do cap Miller trust amounts for HCBS, four states (AZ, KY, OK, and SD) set the same dollar amount cap for HCBS as for institutional care.62 The remaining state (IA) sets a cap of 125% of the average nursing facility cost for individuals receiving HCBS but does not cap the trust amount for individuals in institutions. The concept of spend down comes into play because income and assets above a certain level disqualifies applicants for long-term care under Medicaid. Washington Offices and Barbara Jordan Conference Center: 1330 G Street, NW, Washington, DC 20005 | Phone 202-347-5270, www.kff.org | Email Alerts: kff.org/email | facebook.com/KFF | twitter.com/kff. The money you spend for these services will not work against you for Medicaid eligibility purposes. Increasing or eliminating these asset limits recognizes that enrollees are likely to incur expenses, such as those related to work or community living, and enables them to accrue some savings to meet future expenses. All states elect at least some options to expand financial eligibility for Medicaid LTSS. Not every annuity will qualify, and you may need to make certain adjustments to your annuity for it to be eligible, such as making your annuity nontransferable. This rule recognizes that the asset spend down and income spend down requirements can't apply to every financial transaction you engage in. Medicare Advantage is also known as Medicare Part C. It provides coverage for Medicare Parts A, B, and D through one plan. Most states use a budget period of either one month (11 states) or six months (13 states)22 (Appendix Table 3). Ohio has joined Indiana as the only states using Section 1915 (i) as an independent Medicaid eligibility pathway since this option became available under the ACA (Appendix Table 1). Three states (AR, MA, and MN) do not have an income limit for this pathway. Medicaid LTSS includes nursing home and other institutional services as well as home and community-based services (HCBS). All states electing the medically needy pathway must cover pregnant women and children. Medicaid remains an essential and often the sole source of medical and LTSS coverage for many seniors and nonelderly adults and children with disabilities. Understand the intricacies of asset reduction to qualify for Medicaid coverage. (Opens in a new browser tab). Under Massachusetts FOA-like waiver, sliding scale premiums apply to children in families with income over 150% FPL, beginning at $12 per month.35, Nearly 90% of states (45 of 51) expand Medicaid to working individuals with disabilities whose income and /or assets exceed the limits for other eligibility pathways (Figure 6 and Appendix Table 4).36 This option enables people with disabilities to retain access to the medical and LTSS they need as their income increases. Medicaid covers certain health services that many other insurance programs do not, such as vision, dental, and home care services. One way is by participating in the Medicaid Spenddown Program. And you also lost any documentation confirming the transfer of ownership of the sailboat. You must be certified disabled by the Social Security Administration or by the New York State Office of Temporary and Disability Assistance. In April 2020, it hit an astronomical 33.8 percent, and was still over . Also, don't forget that states have their own laws on how and when the exceptions apply. The money in the trust cannot be withdrawn as cash and must be used for your benefit only. KFF Headquarters: 185 Berry St., Suite 2000, San Francisco, CA 94107 | Phone 650-854-9400 Currently we represent 18 organizations, which offers 52,101 products in your area. Any money left in the trust when the beneficiary dies goes back to the State or to the trust organization. . You must also fall below the Medicaid resource limit for your household size.*. There is a great deal of confusion regarding the spend down of assets for Medicaid qualification. While adoption of the major optional age and disability-related Medicaid eligibility pathways varies substantially across states, state choices about these pathways have remained stable since the time of our last survey in 2015. Over half (12) of the 21 states electing this option use the SSI asset limit of $2,000 for an individual and $3,000 for a couple. ), Figure 7: State Adoption of Optional Medicaid Eligibility Pathways for Seniors and People with Disabilities, by ACA Expansion Status, 2018. For Government Resources Regarding Medicare, Please Visit www.medicare.gov. As we get older, we lose our ability to do the things we used to. The spousal impoverishment rules supersede rules that would otherwise require Medicaid financial eligibility determinations to account for a spouses financial responsibility for a Medicaid applicant or beneficiary by contributing to their cost of care.80, Figure 9: Effect of Spousal Impoverishment Rules on Medicaid Financial Eligibility.