Ohio Medicaid changes “Aged Blind Disabled” Eligibility – State Buy-In for Medicare Premiums

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.)  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, 2016 installment 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.  Today’s installment will discuss the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.

The Ohio Department of Medicaid rule on Miller Trusts (aka Qualified Income Trusts or QITs) took effect on August 1, 2016.  A copy of the final rule is available here.  The latest version of the form Miller Trust from the Ohio Department of Medicaid can be found here.

Ohio’s county offices that oversee Medicaid are going to be able to implement this rule (and the other rule changes that occurred at the same time) very slowly.  While the pace at which the counties get up to speed may seem frustrating, it is very hard to overstate the enormity of the changes that Ohio’s Department of Medicaid is trying to make.  Not only are there the rule changes for people who need long term care that I have been discussing (and will continue to discuss) in my blog and newsletter.  There are bigger changes (affecting tens of thousands more people) in the eligibility rules for Medicaid for people who are disabled but do not need long term care.  In addition, to oversee the new requirements for all affected people, the state and county Medicaid offices have to move to a new software system to manage the Medicaid program.

As discussed previously, someone in Ohio who needs Medicaid support to pay for long term care whose gross monthly income exceeds the Special Income Level ($2,199.00 at this time) must use a QIT to make the income over the Special Income Level not “income” anymore in the eyes of Medicaid.  (Yes, the process is as hard to follow in real life as it is to follow in that sentence.)  In order to get the benefits of the QIT, the amount of income over the $2,199 (or more than just that excess income) must be placed into the QIT each month so that the remaining “countable” income is $2,199 or less each month.  (I know, it’s not getting any more understandable.)  Please realize that there is no real-world logic in this requirement.  These are just the rules.  There are many requirements in the rules that could have been made easier or more logical, but, still, the underlying requirement to put money into a Miller Trust and spend it out of the Miller Trust all in the same month is not logical.

The last installment (on “invisible” gross income) included a discussion how people might forget to count the Medicaid applicant’s premium payment for Medicare part B in gross income.  Well, after a time on Medicaid, it will get confusing again.

Ohio, like most other states, has a Medicare buy-in program for people on Medicaid.  The buy-in program is mandatory (or, at least, very close to mandatory) according to federal rules from the Center for Medicare and Medicaid Services.  It leads (or is believed to lead) to better efficiency of operation and coordination among the Medicare and Medicaid programs.

When someone is placed into the buy-in program, the state will pay the Medicare Part B premium (as part of the person’s Medicaid benefits,) and the person will no longer be responsible for the cost of premiums.  For a person who is newly accepted into Ohio’s long term care Medicaid program, the state’s Medicaid management system will usually add the person into the Medicare buy-in program two to four months later.

When the person is placed into the state buy-in program, the Medicare premiums will stop being deducted from the person’s Social Security check.  The end of the premium deduction makes it look like the person’s income went up.  At the same time, the Department of Medicaid will increase the person’s “patient liability” (aka “patient responsibility,”) which is the amount the person pays to his/her long term care provider, by the amount formerly paid for Medicare premiums.  The amount of money works out the same.  The person on Medicaid doesn’t get to keep any more or any less than before the buy-in.  The person’s spouse doesn’t get any more or any less of a share of the income flowing to the person on Medicaid than before the buy-in.  The care provider doesn’t get paid any more or any less than before the buy-in.  The care provider simply receives a little more directly from the person and a little less from the Department of Medicaid.  The money evens out in the end.

BUT, for people who must use a Miller Trust, this is yet another opportunity for confusion.  The appearance of a change in income could perplex the person handling money for the Medicaid recipient.  The state buy-in occurs with little or no explanation.  The income suddenly increases and, at about the same time, a letter arrives stating that the Medicaid recipient’s patient liability has increased.  I’ve not yet seen the state Medicaid office or the national Social Security office explain that these two events are connected.

STILL, it all works out.  So, you’re possibly wondering what is my point.  If the money evens out, what is the problem?

Remember, as discussed before, Ohio’s version of the Miller Trust is tricky.  Any confusion that attacks the person handling a Medicaid recipient’s money is a possibility that the Miller Trust will not be managed correctly that month.  If the Miller Trust isn’t managed correctly, the person could lose Medicaid coverage.

The Miller Trust requirement isn’t about care.  It’s about money.  Medicaid for long term care is expensive.  Any benefits not paid result in monetary savings to the state.  People whose Miller Trusts don’t get managed “just so” in the month or months following commencement of the state Medicare buy-in should not expect benefits to continue despite the confusion.  It looks like the attempts at confusion could be intentional.

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