Medicaid Policy
Medicaid Policy
A. MAGI-Based Groups
1. In the MAGI-based methodology, choose the method to determine the best estimate of each source of income a individual expects to receive during the certification period. With the exception of retroactive eligibility, use current and expected future income to determine the average monthly income.
Income may be averaged, anticipated, or annualized depending on the type of income, the history of receiving it, or expected future changes.
a. Stable Income: If an individual receives stable, ongoing income, prorate the expected amount over the 12 month certification period to arrive at a monthly amount.
· If the individual is paid monthly, bi-monthly, every week or every other week, determine the average income to be received each pay period.
· Multiply the average by the number of pay periods in the certification period.
· Then divide the total by 12 months to arrive at a monthly amount.
b. New Income:
· If an individual has started a new job during the application month, request verification of the income and pay schedule. An employer statement may be the best way to request verification. Determine the pay schedule and the average income per pay period.
· If the individual has a job offer, but has not started, find out when the job is expected to begin. If income will not be received before the application processing deadline, make an eligibility determination based on the current situation.
· Set a task to request income verification after the new job is expected to begin.
· Adjust eligibility accordingly for the remainder of the certification period upon receiving verification of the new source of income. ,
· An individual reports receiving a new job offer. He does not have a start date.
· Set a task to request income verification after the new job is expected to begin.
· If a new income source is reported or discovered at review, request the needed verifications. Base the estimate on when the new income source starts (if the individual has not already started to receive income from the new source) following similar process as with an applicant who will have new income.
· Once you have sufficient verification, determine the best estimate as follows:
· If the individual will be paid monthly, bi-monthly, every week or every other week, determine the average income to be received each pay period.
· Multiply the average by the number of pay periods remaining in the certification period based on when the first check is received.
· Then divide the total by 12 months to arrive at a monthly amount.
Example- James applied on March 30 for himself and his family for benefits to start in March. He reports he will start a new job on April 1. He is paid every two weeks on Fridays. He will receive his first check on April 19th. He will only receive 1 check in April. He works 40 hrs/wk, earning $11.00/hr. He will receive 23 checks in the certification period because he had no income in March and only 1 check in April.
· Best estimate of income = $880 x 23 = $20,240/12 = $1,686.67/month
· Monthly countable new income = $1,686.67
c. Anticipating Infrequent Income: For MAGI-based coverage groups, anticipate infrequent income only when there is a history of the payments, and the individual expects to continue receiving the income. Prorate the income over the certification period, and add the prorated amount to the monthly income. An example is taxable interest income. It may be received monthly, quarterly or annually. Prorate the amount over the 12-month certification period and count 1/12 in each month.
d. Terminated Income: If an individual will receive income during the certification period that has terminated , determine the total expected terminated income and divide by 12 months to arrive at the monthly average amount to be received during the certification period.
Example- John has been laid off from his employment. He says he can't afford his COBRA coverage and wants to see if he can qualify his family for Medicaid. His company gave him a severance check for $5,000, and he received only one pay check of $1,500 in the application month, which is his last check. There is no other income.
o Best estimate of income = $6,500/12 = $541.67
o Monthly countable terminated income = $541.67
o John's HH size is 3 and so he qualifies for PCR coverage. His children qualify for Child Medicaid.
e. Seasonal Income: If an individual expects to receive temporary, seasonal, contract or other infrequent income, prorate the income over the certification period.
When prorating temporary, seasonal or infrequent income, total the amount expected to be received during the certification period. Then divide it by 12 to determine the monthly amount.
Example (seasonal) - For the past 5 years, John has worked as a ski instructor for 6 months of the year at $1000/month. He also works for a landscaping company during the other 6 months and earns $2000/month wages.
· Best estimate Ski Instructor = 6 months x $1000/month = $6000/12 months = $500/month
· Best estimate Landscaping = 6 months x $2000/month = $12,000/12 months = $1000/month
· Total countable income: $500 + $1000 = $1500/month
Example (temporary) - Jack was laid off and is now receiving unemployment. His weekly checks are $350 and he has 15 weeks of unemployment remaining as of the first day of the application month. Since this income will end, prorate it over the certification period. This will factor in the zero income months. Add the monthly amount to any other income the individual or household has.
· Best estimate Unemployment = $350/week x 15 weeks = $5250/12 months = $437.50/month
· Total countable Unemployment income $437.50/month.
f. Self-employment. If an individual is self-employed, determine the expected annual income the individual expects to receive from the self-employment work. Divide the annual amount by 12 to determine the average monthly income.
· Find out expected gross income and expected expenses when calculating the expected net income. See Section 405-2 and 405-3 for self-employment policy.
· If the self-employment is new, make the most reasonable estimate of what the individual expects to receive during the certification period.
2. Use the total monthly amount of income expected to be received to conduct a reasonable compatibility test and to determine eligibility for the certification period.
3. Reasonable compatibility: Determine if the reported income is reasonably compatible with electronic verification sources. The reasonable compatibility test compares the best estimate of countable income the agency derives based on the client's statement with the best estimate of countable income derived from available electronic income sources. Compare those amounts against the income limit for the applicable MAGI-based coverage group. Deduct any allowed expenses from both the client statement of income and the electronic source of income before doing the reasonable compatibility test.
a. If both the client's statement and the electronic income match are at or below the income limit for the applicable MAGI-based coverage group, the individual is eligible.
b. If both the client statement and the electronic income match are above the income limit for the applicable MAGI-based coverage group, the individual is ineligible for the MAGI-based coverage group. Determine eligibility for any other medical assistance program.
c. If one income amount is above and one income amount is below the income limit, request additional verification from the individual. Sec. 731.
d. Eligibility for certain MAGI-based coverage groups allow a 5% of FPL disregard when determining eligibility. Refer to 440-5.
e. If electronic income information is unavailable, use other methods to verify the individual's income.
If a individual claims no income, or income is insufficient to meet basic needs, ask the individual how she is meeting basic living expenses (shelter, food, utilities, etc.)
B. Non-MAGI-Based Family, Child and Pregnant Women Groups (i.e., Medically Needy)
1. Use prospective budgeting for non-MAGI-based coverage groups to determine the monthly income. Budget based on the individual's current circumstances.
· The household size may change (in some cases.)
· Whose income counts is different between MAGI-based and non-MAGI-based groups.
· The countable income may be different for the non-MAGI-based groups.
· Income may be averaged, anticipated, or annualized depending on the type of income and the history of receiving it.
· Income factoring applies to Family related eligibility groups.
2. Current Income: Use current income to determine eligibility for the application month and the spenddown, if applicable.
· Do not count expected future income from a new source that is not being received in the current month. Complete a new best estimate when that income starts being received.
· If the agency has all the pay stubs for the application month, use only that information to determine the average per pay period. Factor that average if paid weekly or bi-weekly.
· If income terminated or began in the application month, use un-factored actual income if the individual did not receive the full number of checks for the month.
Example: Margie applies on June 25th for herself and her two children. She reports she has worked at the same job for two years. She is paid every two weeks. In the application month her MAGI-based income exceeds the PCR income limit. The electronic interface verifies she received the following income:
· June 9 - $877.24 and June 23 - $910.16. Average bi-weekly income is $893.70. For MAGI-based eligibility, multiply this by 26 checks and divide by 12. The MAGI monthly average income is $1936.35.
· Her children will qualify for the MAGI Child Medicaid program. Margie is over the Adult Expansion income limit. Her only option is medically needy coverage.
· The best estimate of her Family Medically Needy income for June is: $877.24 + $910.16 = $1787.40/2 = $893.70 x 2.15 = $1921.46 - $90 earned income disregard = $1831.46
· Monthly Family Medically Needy income: $1831.46. If Margie needs Medicaid for June, her spenddown would be $1831.46 - $678 = $1153.46. She could use medical bills from the retroactive months, unpaid bills from before the retroactive months, and June incurred expenses to meet the spenddown.
3. Terminated income: If income terminates in the application month, do not count that income for future months.
· If a individual will receive income from a terminated source in the application month or in the first month of the new certification period after a review, count the actual amount received in that month.
· Do not factor terminated income.
Example: Zane applies in June for Medicaid for himself due to a surgery. They have 1 child. He reports his job ended and he will get his last check in June. His total income in June from the terminated source will be $1200. His wife works and is paid a salary of $2000/month.
For MAGI programs, prorate the terminated income over the certification period. $1200/12 = $100 a month. Added to the wife's monthly salary of $2000, the total monthly income is $2100. The child is eligible for MAGI-based Child Medicaid. Zane and his wife are over the Adult Expansion limit for 3.
· The non-MAGI best estimate for Family Medically Needy for June is: $1000 terminated income + $2000 wife's income = $3000 - $180 for earned income disregard = $2820. The spenddown for June would be $2820 - $678 = $2142.
· Their spenddown in June would be based on the actual income of $3000. In July forward, the spenddown will be based on the wife's $2000 monthly income after applying allowed income disregards.
· They could use medical expenses to meet the spenddown in June.
4. Seasonal Income: If a individual is working a seasonal job at the time of application or renewal, use the income the individual receives to determine the best estimate. Factor income received weekly or every other week to arrive at a monthly amount. Count this income only for the number of months the individual will work at this seasonal job.
· If the individual expects to start/stop a seasonal job sometime during the certification period, do a new best estimate at the time the seasonal job starts/stops.
· Remember to set a task to re-determine income at the time of such change.
Example: A individual only works nine months of the year. Individual applies in a month they are not working. They fail the MAGI-based group because the agency anticipates the future income. However, for medically needy coverage, the household has no income and is eligible without a spenddown. When that income is expected to start again, the worker needs to re-determine eligibility and count that income.
5. Infrequent Income: If an individual receives income infrequently such as from contract work, commissioned employees, self-employed individuals, or other similar employment, determine the monthly average income based on the individual's income history. Such income may be annualized or counted over the period of months it is intended to cover. If the income is earned, and it is what the individual typically uses to live on throughout the year, annualizing is usually the best way to determine the monthly income.
6. New Income: If income begins in the application or renewal month, count the actual expected amount of income from that source for the household member. Factor new income only if the individual receives the full number of paychecks for the month.
· Do not factor new income in months when the individual does not receive the full number of paychecks for that month.
· If the income received in the application month is not reflective of income the individual expects to receive in future months, a second best estimate may be required for the ongoing months.
Example 1: Sue applies on June 15th for herself and her two children. She reports she just started a new job. In June, she will only receive 1 check of $460.
In future months, she will be paid every two weeks, and the checks will be $920 each.
· Her MAGI income would be $460 + (920 x 24) (because she will only receive 1 check in June) = $22,540. Divided by 12: $22,540/12 = $1878.33)
· Her children qualify for MAGI Child Medicaid. Sue is over the limit for the Adult Expansion.
· For medically needy, her actual June income is only $460. She qualifies for Family Medically Needy without a spenddown in June.
· Her income for future months is $920 x 2.15 = $1978. She reports day care expenses of $250 a month per child. Both children are over age 2. Her spenddown would be:
$1978
- 90 Work allowance
$1888
- 350 Child Care
$1538
- 583 BMS
$955 Spenddown for July
Example 2: Same situation as in Example 1. Worker finds no electronic source of income for the retroactive period and reviews eligibility for the retroactive months. Sue reports no income in the retroactive period, and meets all other eligibility criteria. The worker approves her for MAGI-based PCR in those months, because we only count actual income. Since she qualifies for PCR in the retroactive period, she qualifies for Transitional Medicaid when her income increases in June. Begin Transitional Medicaid in June.
7. Temporary income: When income will be received for a set time during the certification period, but not for the entire certification period, set a review about the time of the expected change to do a new best estimate of income. For example, if someone will receive 14 weeks of unemployment during the certification period, and is eligible for medically needy coverage, schedule a review to occur just before the end date of the income. Do a new best estimate based on the individual's current circumstances at that time. Stop counting the unemployment, and base eligibility on the income the individual is receiving at that time.
8. Expected changes: If a change is expected but not certain, such as income from a seasonal job, set a shorter review period to check on the expected change. Do a new best estimate based on the actual change.
9. Factoring Income: Non-MAGI-Based Family, Pregnant Women and Child
· Factor income received weekly or every two weeks. First determine the most accurate best estimate of income a individual receives each pay period.
· To factor weekly income, multiply the weekly best estimate amount by 4.3 to determine a monthly amount.
· To factor income received every two weeks, multiply the two-week best estimate by 2.15 to determine a monthly rate.
· Do not factor income for Retroactive Medicaid months. See section 445-2 to determine what income to count for the retroactive month.
· Do not factor income for Aged, Blind or Disabled Medicaid programs, or MAGI-based coverage groups.
· Do not factor new income in months when the individual does not receive the full number of paychecks for that month.
· Do not factor terminated income.
10. Counting the Income of a non-parent caretaker relative's household
a. The total countable income is divided equally between each of the non-parent caretaker relative’s family members.
· Total countable income = Earned Income (after allowable disregards) + Unearned Income.
· Non-parent caretaker relative’s share of countable income = Total countable income divided by family size.
· Spouse's share of countable income = Total countable income divided by family size.
c. Count the non-parent caretaker relative's portion of the income to determine eligibility. If the spouse will be included in the coverage, also count the portion of income for the spouse to get total income for the couple.
· Do not include children of the non-parent caretaker relative or spouse in the medically needy household size for Non-Parent Caretaker Relatives.
· However, if a non-Parent Caretaker Relative has their own dependent children, and the children meet the deprivation test, it may be more beneficial to determine eligibility based on the caretaker relative's own household.
C. Best Estimate for Aged, Blind and Disabled Medicaid, and Long-Term Care Groups
1. Use the same prospective budgeting process for aged, blind and disabled categories (generally referred to as Disabled Medicaid) and Long-term Care/Waiver groups as you would for any other Medicaid program. The only difference requires you to count actual monthly income received, or expected to be received, rather than factoring the income. Count the third or fifth paycheck in the month received to determine Medicaid eligibility for aged, blind and disabled Medicaid cases for such months. If changes are expected in the future, control for those changes through the review process.
2. Annualized self-employment income for aged, blind and disabled cases. (Other earned income may be annualized such as contract work, or work done on a commission basis, when the work is being performed during most of the year).
3. Count seasonal employment only during the months the individual is receiving that income.
4. For Waiver Medicaid Programs, if the client's statement of total earned income is below $65 per month, waive the requirement to request verification of actual income. However, if there is information (electronic data, deposits to bank accounts, etc.) that indicates the client statement is incorrect, request verification from the individual.
D. Documentation and Changes
Document the method of determining the best estimate.
Refer to Section 815-5 when a change has occurred that results in the best estimate needing to be changed. For residents of nursing homes, Utah State Hospital, and Utah Developmental Center follow the policy in 833.