Ohio Medicaid changes “Aged Blind Disabled” Eligibility – No more Monthly “Spend Down”

This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled 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.)  The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system.  The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care.  The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month.  The June 23, 2016installment discussed the difficulty in understanding the need for a Miller Trust.  The July 1, 2016 installment discussed the need to empty the Miller Trust account every month.  The July 7, 2016 installment discussed the need to balance the Miller Trust with the desire to have health insurance.  The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts.  The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document.  The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust.  The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.  The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust.  The August 18, 2016 installment discussed  the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.  The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust.  The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust.  The September 9, 2016 installment discussed how Ohio’s Medicaid rules appear to count income tax refunds twice.  The September 15, 2016 installment discussed the Ohio Department of Medicaid’s change in policy regarding real estate (other than the residence.)  The September 22, 2016 installment discussed keeping the house with an intent to return to home.  The September 29, 2016 installment discussed keeping the house while a dependent family member lives there.   The October 6, 2016 installment discussed the home that is co-owned by someone else (other than the spouse.)  The October 27, 2015 installment discussed real property that is “essential for self-support.”  The November 10, 2017 installment discussed the retirement funds belonging to the spouse who does not seek Medicaid’s help with long term care costs.  The November 17, 2016 installment discussed the 2016 changes in how Ohio Medicaid will allow applicants to give away some of their assets cover the resulting penalty period through a return of part of the assets.  The December 1, 2016 installment discussed Ohio Medicaid’s new prohibition on using promissory notes to recover from an applicant giving away assets.   The December 8, 2016 installment discussed the possibility of using a Special Needs Trust to recover from assets given away creating a Medicaid penalty period.  The December 15, 2016 installment discussed the use of short-term annuities to recover from a long term care Medicaid penalty period that results from giving away assets.  Today’s installment will discuss the end of the monthly “spend-down” to achieve income eligibility for the type of Medicaid that substitutes for health insurance.

The Medicaid that has no more monthly spend-down is NOT Medicaid for long term care.  It’s the Medicaid that provides financial support for doctor visits, prescriptions, hospital visits, etc. for the Aged, Blind, and Disabled population that has no more monthly spend-down.  In other words, there’s no more monthly spend-down for the Medicaid that is available to Aged, Blind, and Disabled people who need Medicaid because they can’t afford privately purchased health insurance.  We’ll call this “health-insurance-Medicaid” (as opposed to the “long-term-care-Medicaid about which I usually write.)

Obviously, a statement that a monthly spend-down is no longer available means that there used to be a monthly spend-down.  That’s right.  There used to be a monthly spend-down that allowed many people to meet the income requirements necessary to receive Medicaid support.

Here’s how it worked.  Medicaid is available only to people below a certain level of income.  Before the Affordable Care Act made health-insurance-Medicaid available to people based only on income, health-insurance-Medicaid used to be available only to people who had a particular, identified need AND whose income was low enough to qualify.  For example, families with low income that qualified for the Aid to Families with Dependent Children also qualified for health-insurance-Medicaid.

One of the particular, identified needs that could qualify someone for health-insurance-Medicaid was a disability.  People who were disabled (meaning that they cannot financial support themselves through work) who also had income below a certain level (which was adjusted for inflation from time to time,) qualified for health-insurance-Medicaid.  So, some people who had disabilities could not qualify for health-insurance-Medicaid because their incomes were too high.

BUT, according to Ohio rules, a disabled person could spend money on his/her health care each month, and that amount would be deducted from his/her income.  If, after the deduction of health care spending, the person’s remaining income was below the income limit enough to qualify for health-insurance-Medicaid, then the person would receive health insurance Medicaid for that month.

This was a monthly nightmare for the various county Departments of Job and Family Services, the agency that oversees financial eligibility for Medicaid.  According to some estimates, 20,000 to 30,000 people had have their monthly spending monitored to see if they qualified for Medicaid for that month.  Then, next month, it would start over again.

I MUST HERE GIVE CREDIT TO OHIO for taking care of its people.  (You won’t hear that from me terribly often.)  Most of these 20,000 to 30,000 people would have had no health insurance if Ohio had not allowed a monthly spend-down to qualify for health-insurance-Medicaid.  With their disabilities, they would not have been able to get private health insurance because their disabilities would be “pre-existing condition” that health insurance companies would not have covered.

Then, after the Affordable Care Act was put into effect, all of the 20,000-30,000 could get health insurance.  (Remember, pre-existing conditions could not be used as a reason to withhold insurance coverage.)  So, Ohio ended its monthly spend-down program for disabled people with the expectation that all Ohioans (including people with disabilities) could get health insurance.  Even if a good number of these 20,000 to 30,000 people qualified for Medicaid under the Affordable Care Act income test, Ohio will have a smaller share of the health care costs for those people.  Under the ACA, the federal government picks up a larger share of the cost than it picked up for pre-ACA health-insurance-Medicaid.   The state saves money.

That savings of state money for disabled people’s health-insurance-Medicaid is, in my view, the driving force behind all of the changes in Ohio’s Medicaid rules of August 1, 2016.  It’s all about the money.

This is the end of the series on “Ohio Medicaid changes ‘Aged Blind Disabled’ Eligibility” for 2016, for now at least.  (This series started April 28, 2016.)  We finished just in time.  The end of the year is here.

With Christmas and New Year’s Day around the corner, I do not expect to post another blog until January.  Happy Holidays to all.  Best wishes for 2017.

Peace on Earth!  Good will to all Men and Women!

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