431-1 Health Insurance Premiums

Effective Date: June 1, 2020

Previous Policy (409-1 incorporated into section in 431-1 as of June 1, 2020)

A. Introduction

A health insurance premium is a payment to an insurance company or health plan organization in return for coverage of medical services. The health insurance plan will pay some or all of the cost of a member's medical bills. Health insurance does not include life insurance, homeowner's insurance, or auto insurance. (These types of insurance may pay some medical bills in certain circumstances, but do not meet the criteria of being a health insurance plan.)

· Deduct health insurance premiums a member pays from income only in accordance with the subsequent policies.

· Health insurance premiums include premiums paid for Medicare. Deduct Medicare premiums only as defined in the following subsections.

· Medicare Gap or Supplemental insurance is health insurance. Treat the premiums like any other health insurance premiums.

B. General Policy

1. Health insurance premiums a member pays may be used to:

· Help meet a member's spenddown, including medically needy members on the New Choices or Physical Disabilities waivers (431-1.1)

· Reduce the amount of income used to calculate a member's MWI (Medicaid Work Incentive) premium

· Reduce what a member must pay for long-term care services. This payment is called a cost-of-care contribution. Most residents in nursing homes and some members receiving home and community based services waivers must pay a cost-of-care contribution.

· Premiums paid for, in part or in whole, by the Medicaid Buyout program are treated as if the member is making the payments.

[NOTE: eREP deducts health insurance premiums during the eligibility decision. Even though this process occurs before displaying the spenddown or cost-of care amount, the premiums reduce the amount a member owes. For the MWI premium calculation, eREP deducts health insurance premiums from income before it calculates the MWI premium a member must pay.]

2. Do not deduct health insurance premiums to meet the income limit for the following programs:

· Aged and Disabled Medicaid 100% of poverty group (443-2);

· Medicaid Work Incentive (314);

· Medicare Cost Sharing: QMB, SLMB, QI, QDWI coverage (320).

3. Long Term Care, and Home and Community Based waiver programs. Refer to 431-1.3, and check the applicable waiver policy sections to determine when to deduct health insurance premiums (380 ff).

4. Medicaid Work Incentive (MWI). Refer to 431-1.2. Health insurance premiums are used only during the premium calculation.

431-1.1 Medically Needy Programs and Health Insurance Premiums

431-1.2 Medicaid Work Incentive and Health Insurance Premiums

431-1.3 Long-Term Care and Health Insurance Premiums