Medicaid Policy
Medicaid Policy
Previous Policy (415-2 was previously found in 403-2 until November 1, 2021)
A. Determining the Type of VA Income
Determine the type of VA payment received. The recipient may be a veteran or a family member of the veteran. Some checks may include more than one type of payment. You may need to obtain the following information from the individual:
1. Veteran’s name,
2. Who receives the VA payment,
3. Relationship of the Medicaid member to the veteran and whether they live with the veteran, and
4. Whether the veteran has a service-related disability or died while in the service.
B. Forms of VA Income
1. Pensions
· If the payment is not due to a service-related death or disability, it is most likely a pension payment.
· Assume a VA pension is partly or entirely needs based unless there is evidence to the contrary. Most pension payments are based on financial need.
2. Compensation
· Compensation payments are based on service-related disabilities or death of the veteran.
· Compensation payments are not usually needs based. However, compensation payments made to a parent whose child died while in the armed forces are based on need.
3. Aid and Attendance/Housebound Care Payments
4. Payments for Unusual Medical Expenses
5. Certain Payments Made to a Veteran’s Child born with Spina Bifida or other disabilities
6. Educational Income
C. VA Income for Family Members
A VA check received by a veteran or veteran’s surviving spouse may include benefits that belong to other family members. This happens when the amount of the VA benefit is based on the number of dependents the veteran has.
1. An “augmented benefit” is an increase in the payment to a veteran or a veteran’s surviving spouse or higher VA income eligibility limits, because of a dependent. The VA normally issues an augmented VA benefit as a single payment to the veteran or the veteran’s surviving spouse.
a. The "beneficiary’s portion" is the part of an augmented benefit that is attributable to the veteran or the veteran’s surviving spouse.
b. The "dependent’s portion" is the part of an augmented benefit that is attributable to the dependent.
2. The dependent’s portion of the VA benefit is VA income to the dependent if the dependent lives with the beneficiary (i.e.: veteran or surviving spouse).
3. The dependent’s portion of the VA benefit is not income to the dependent or the beneficiary if the dependent does not live with the beneficiary. The dependent may be able to receive direct payment of the portion attributable to the dependent (known as apportionment). Approve Medicaid, if otherwise eligible, pending the application for apportionment. Require the dependent to apply for direct payment when the dependent:
a. Is the spouse or child of a living veteran or the child of a deceased veteran with a surviving spouse and the veteran or surviving spouse receives VA compensation, pension or educational benefits; and
b. Does not reside with the designated beneficiary, (i.e., the veteran or the veteran’s surviving spouse); and
c. Has not been denied apportionment since living apart from the designated beneficiary. (See 223-4)
D. Exempt Income
1. MAGI-Based Programs
For MAGI-based medical assistance programs, do not count any VA payments as income. This includes pensions, compensation and VA educational income which may include an allowance for housing or subsistence.
2. All Other Programs
The following VA payments are not counted as income for Medicaid.
a. Aid and Attendance or Housebound Payments
b. Payments for Unusual Medical Expenses
c. VA Educational Income payments, which are part of a vocational rehabilitation program. This includes a subsistence allowance and any augmentation of the subsistence allowance for dependents.
d. Any portion of a VA educational benefit that is a withdrawal of the veteran’s own contribution is a conversion of a resource and is not income. (See 521-34 for resource treatment.)
e. The augmented amount of a VA payment that is paid to the veteran (or the veteran's spouse) when the dependent entitled to such augmented payment does not live with the designated beneficiary (the veteran or spouse). This portion of the payment is not counted as income for the veteran nor for the dependent. (See information on apportionment.)
f. State Annuities for Certain Veterans.
E. Countable VA income
The following income is counted to determine Medicaid eligibility for non-MAGI-based programs.
1. All non-MAGI-based Categories
VA educational income that is not under the vocational rehabilitation program and is not a withdrawal of the veteran's own contributions is countable income. Reduce the countable income by the allowable educational expenses described in 415-6.
a. Any portion received for living expenses is countable income.
b. If the educational income is augmented for dependents, that portion is countable income to the dependent. The augmented amount is not subject to the allowable educational expenses. (If the dependent does not live with the veteran, an augmented portion received by the veteran is not income to either the veteran or the dependent.)
2. Family Medically Needy Categories
a. Count VA payments that are not exempt income to determine eligibility of the individual and spouse for Family medically needy coverage.
b. Count non-exempt VA income of a parent to determine the eligibility of a child. If the payment is augmented for the dependent child and the child lives with the veteran (or the veteran's spouse if the spouse receives the VA income), count the augmented amount as income for the child.
c. Count an apportioned payment as income of the dependent.
3. Aged, Blind and Disabled Categories
a. Count needs-based VA income (usually pensions).
· For aged, blind and disabled categories, do not deduct the $20 disregard from needs-based income. If there is other income, deduct the $20 disregard from the other income.
b. Count compensation income.
· Deduct the $20 disregard from compensation if it is not needs based. Most compensation is not needs based.
F. Deeming Income
1. Aged, Blind or Disabled Medicaid
a. If a spouse is receiving a needs-based VA payment and will not receive Medicaid, do not deem any income of the veteran spouse to determine the Medicaid eligibility of the other spouse. See 410-2 for information about deeming income from a spouse when only one member of the couple wants Medicaid. The exception to this rule is the Medicaid Work Incentive. See section 314.
b. Follow the same deeming concept when the spouse of a veteran will be on a Medicare Cost-sharing program and the veteran will not be.
c. Count the needs-based VA payment when looking at Medicaid or Medicare Cost-Sharing programs for both the VA recipient and the spouse. Determine eligibility for them together as a couple.
d. If a parent receives a needs-based VA payment and will not receive Medicaid, do not deem any income of the parent to determine the eligibility of the child for disability or blind Medicaid. The exception to this rule is the Medicaid Work Incentive. See 314.
2. Count VA payments that are not needs-based or excluded from income when deeming income from a spouse or parent.
G. Long Term Care Considerations
Pensions are treated differently for individuals in nursing homes. Pensions may be either improved pensions or protected pensions. Most VA pension recipients receive improved pensions.
1. Individuals applying for and receiving their first pension check after 12/31/78 can only receive an improved pension.
a. When a recipient of an improved pension enters a nursing home, the payment amount is reduced to $90. The $90 is an Aid and Attendance payment, which is not counted as income.
b. If the individual has other income besides the $90 payment, deduct the $45 personal needs allowance, or in the case of short-term institutionalizations the BMS, from the other income to determine the individual’s cost of care.
2. If an individual received his first pension check before 12/31/1978, he may have elected to receive a protected pension. Protected pensions are greater than the $90 improved pension.
a. Protected pensions are needs-based and countable.
b. Individuals receiving a protected pension at the time of their Medicaid application must continue to receive this protected pension.
c. Individuals who are receiving the protected pension cannot elect to receive the improved pension without endangering their Medicaid eligibility for the month they receive their first $90 improved pension payment.
d. The individual must continue to receive the protected pension. If they elect the $90 payment, they are ineligible for the month they are cashing the first improved pension check of $90.
e. The individual can change back to the protected pension at any time prior to cashing the first $90 improved pension check. After cashing the first $90 check, they cannot elect to go back to the protected pension that they received before. The individual could be eligible for Medicaid the month after they receive and cash their first $90 improved pension check.
i. If an ongoing Medicaid recipient elects to receive the improved pension instead of the protected pension, they are ineligible for Medicaid the month that they cash their first $90 pension check. Due to the 10-day notice requirement for adverse actions, it is not possible to stop eligibility for the current month.
ii. If an applicant for nursing home services receives and cashes their first $90 improved pension check in the first month they could receive nursing home Medicaid, they are ineligible for Medicaid for that month.