This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled (ABD) program coming in 2016-2017. The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.) Today’s installment will discuss the new income rules.
The biggest change with the upcoming transition of Medicaid systems will be in the income rules on Medicaid eligibility. The income rules will be different for people who need long term care than for people who do not need long term care.
INCOME LIMIT FOR PEOPLE WHO DO NOT NEED LONG TERM CARE
People who do not need long term care have an income limit of $733 (gross) per month for the ABD program. The amount is set by federal law and is uniform throughout the states that use the Medicaid system that Ohio has newly adopted.
The limit under the old rules was $634, but, because of the “spend down” system, this $634 was a soft ceiling. (The “spend down” system allowed many people who had too much income to stay on Medicaid by reducing their countable income by the amount of any medical expenditures that month.) Under the new rules, monthly “spend down” is not available. The $733 is a hard ceiling.
(Note: “Spend down” is still available to reduce assets for long term care Medicaid, but that usually is a one-time thing, not a monthly task.)
Anyone over the $733 limit is not eligible for ABD Medicaid. The people who become newly ineligible for Medicaid must turn to “the health care exchange” (aka HealthCare.gov) to get medical coverage. While that may be a bit unsettling and take some people out of their comfort zones, the result will be okay for a good number of these people. Most people who will no longer receive Medicaid coverage should be able to get highly subsidized medical insurance policies which, because they are commercial policies, should provide access to a greater number of medical providers. (Many medical providers refuse to accept Medicaid. Many of those medical providers will now be available to the people coming off of Medicaid coverage.)
People for whom marketplace policies do not provide enough coverage may need to consider whether to try to get into a long term care program (discussed below.)
INCOME LIMIT FOR PEOPLE WHO DO NEED LONG TERM CARE
People who need long term care have an income limit of $2199 (gross) per month. This is not a hard ceiling, however. People who need long term care and have income above $2199 can stay on Medicaid by using a Qualified Income Trust aka “Miller Trust.” (Under the old rules, these people had an automatic spend down each month because of their monthly care costs.)
The Miller Trust is a way to divert income without having it count as income. (Remember, I warned that logic may not apply.) Under the new rules, someone using a Miller Trust must put income from specific sources into the trust after the income arrives in the person’s personal account. (The specific income sources may not be the same for all such people.) Then, the contents of the trust must be disbursed from the trust in specific amounts in a specific order (perhaps better described as a prioritization) each month. The amounts that go through the Miller Trust aren’t counted as “income.”
Ohio Medicaid is helping most covered people set up their Miller Trusts but will not help with ongoing management of the trusts. The monthly movement of money into and out of the trust will be a huge burden but is mandatory each month. People whose trustees don’t take all the correct steps EACH MONTH risk losing Medicaid coverage.