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ABD and Medically Needy Family Medicaid (Community Programs)
Health insurance is any third party who will pay a client's medical bills, or reimburse a client for medical expenses due to the receipt of a premium payment. Health insurance does not include any type of life insurance, homeowner's insurance, or auto insurance.
Health insurance premiums are deducted from income for Medicaid programs that allow a client to spenddown.
Health insurance premiums are deducted from countable income before calculating the MWI premium. (See Sec. 314)
Health insurance premiums are deducted for individuals on HCB waivers during the post-eligibility process. (See 386)
Do not deduct health insurance premiums to meet the income limit for the Aged and Disabled Medicaid 100% of poverty group, the MWI program, QMB, SLMB, QI, QDWI coverage, or MAGI-based Parent/Caretaker Relative, Child, Pregnant Woman, or Adult Age 19-64 Medicaid program. (See Sec. 305, 314, 320-2, 320-3, 320-4, 320-5, 340-349.)
The premiums paid by a Medicaid Work Incentive recipient are not a health insurance premium. Do not enter the Medicaid Work Incentive premium as an expense. The MWI premium paid by a household member for coverage under the Medicaid Work Incentive program will reduce the Medicaid spenddown owed by other household members; however, the deduction will show up on the computer after the premium is paid.
Deduct the cost of health insurance the client, spouse or parent of a minor client pays that covers the client, the client's spouse and/or dependent children in the household.
Deduct the whole premium amount in the month payment is due. Do not pro-rate the premium over the months it is intended to cover. For instance, if the full premium is due once a quarter, deduct the premium only in that month; do not allow one-third each month of the quarter.
A premium expense that exceeds the spenddown can be used to meet the next month's spenddown ONLY to the extent the premium is unpaid at the beginning of that month and ONLY the amount that has not already been allowed as a deduction.
Do not allow a deduction for membership dues associated with being eligible for the health insurance. For instance, if the person must be a union member to receive the insurance, the union dues the person pays are not an insurance premium and cannot be allowed as a deduction from income.
Deduct health insurance premiums the client (spouse or parent) paid during the retroactive period in the month it was paid. If the premium cannot all be deducted in that month because it is more than the spenddown, it may be used in a later retroactive month or the application month until the full amount has been allowed as a deduction. It cannot be used in any month after the application month. To use the premium in more than one retroactive month, post only the amount to be used each month as an expense for such month. Document your actions. (See 415-5)
Do not deduct Medicare Part B premiums a client paid in the application month or retroactive months when the client will receive Medicaid, QMB, SLMB or QI coverage for those months (or any portion of those months.) Social Security will reimburse the client once the State pays the premiums through the Medicare BUY-IN for every month the client is eligible for Medicaid, QMB, SLMB, or QI. The State pays the full premium for an eligible month even when eligibility begins on a day other than the first. (See #6 when deeming income.)
If you cannot make the person eligible under at least one program (say SLMB or QI which both allow retroactive coverage) for all three retroactive months, and the client paid Medicare Part B premiums in any of those months, you can deduct premiums paid for those ineligible months from the spenddown through the application month.
Do not deduct the premium owed for any month in which the client will be eligible for Medicaid or a Medicare Cost-Sharing program, even if the client has already paid it. After the client becomes eligible, SSA will reimburse any premiums the client paid.
If a case will be opened and then closed, the Medicare BUY-IN process still takes effect. Enter the Medicare "HIB" number on the appropriate computer screen. This will insure the client will be reimbursed for the Medicare premium in the Medicaid, QMB, SLMB, or QI eligible months.
Deduct Medicare Part D Premiums That a Client Pays.
Persons who are eligible for Medicaid or a Medicare Cost-Sharing program are eligible for the Low-Income Subsidy and may not have a Medicare Part D premium if it is equal to or below the Low-Income Subsidy Premium Allowance established by CMS. See Table II for the LIS Premium Allowance amount.
If the Part D premium is more than the Low-Income Subsidy Premium Allowance, the difference between the full premium amount and the LIS Premium Allowance is health insurance and must be posted as an income deduction.
When Deeming.
When deeming income from a person who does not receive Medicaid, QMB, SLMB, or QI coverage, deduct the Medicare Part B premium that person pays in the month it is paid.
If income is deemed from a person who is receiving Medicaid, QMB, SLMB or QI coverage, do not deduct the Medicare Part B premium paid for any month the person will be eligible under one of these programs.
Buy-Out
Allow a deduction for the amount of the health insurance payment when TPL coverage is purchased through the Buy-Out unit. The fact that the State makes the payment has no bearing on whether the deduction can be allowed as a health insurance expense. See 225-6.
Long-term Care and Waiver Medicaid
For institutional cases, deduct only the amount of the health insurance premiums that cover the institutionalized client and are paid with the institutionalized client's funds.
Do not deduct any Medicare Part B premiums the client paid for any month that the client will be eligible for Medicaid, QMB, SLMB or QI coverage.
Income is not deemed from a spouse to the institutionalized spouse. Therefore, you cannot deduct from the client's income any health insurance premiums or Medicare premiums the client's spouse paid.
For all HCB waiver clients, income is not deemed from the non-waiver spouse. Do not deduct from the client's income any health insurance premiums or Medicare premiums the client's spouse pays. (See sec. 380)
Health insurance premiums are not deducted for New Choices waiver clients to determine if they qualify under the 100% FPL group..
On an institutional or waiver case, deduct health insurance premiums paid by the institutionalized or waiver individual ONLY for the institutionalized or waiver individual during the post-eligibility process. If the client is an MWI eligible client under the New Choices Waiver, the Health insurance is deducted from income to determine the MWI premium. Do not allow health insurance premiums paid for other family members or premiums for the institutionalized or waiver individual paid by a family member's funds. If a combined family premium is paid, only the portion of the premium attributable to the institutionalized or waiver individual is deductible, and only if it is being paid from the institutionalized or waiver individual's income.
If both members of a married couple are institutionalized or covered under a waiver, and health insurance premiums are being deducted from one person's income to cover both of them, a deduction can be allowed for each member for their own portion only if they each pay their share.
It is possible for the institutional/waiver client to reimburse the community spouse for a premium paid by the community spouse. If the premium is taken out of a check belonging to his spouse the institutional/waiver client may reimburse the spouse from his income. Allow a deduction if the institutional or waiver spouse says he repays his portion of the premium to the community spouse.
In some cases the community spouse has control over the client’s income, pays the contribution to cost of care and keeps the remaining income. In this situation, if you allow a deduction for the client’s portion of the health insurance, the community spouse is automatically reimbursed.