On August 1, 2016, Medicaid was transformed for those who are looking for nursing home or home care services. Prior to August 1, 2016, Ohio revised some of its regulations to prevent eligibility for those who have gifted any assets in the last five years.
This is the first of several articles regarding these topics. To give an overview, Ohio used to be what is referred to as a 209(b) state. In 1972, states could do one of three things: 1. Adopt the SSI criteria, and the state would have to make a decision as to whether an applicant met the SSI criteria. 2. They could become a “1634” sate. These states would accept the SSA’s decision of eligibility, SSI beneficiaries would automatically be enrolled in Medicaid, and the state would not reconsider the determination made by SSA. The third option was the 209(b) option described below.
Since August 1, 2016, Medicaid has now become a “1634” State, which has ushered in some new helpful and disturbing changes.
209(b) History
In 1972, Congress expanded the Medicaid program to cover persons who are aged, blind, or disabled . Ohio opted to be a “209(b) state. Section 209 required states to provide Medicaid to anyone who received Supplemental Security Income. However, Paragraph (b) of section 209 says that states could choose to be more restrictive – to have lower income or resource limits, if they opted to provide Medicaid under 209(b). For instance, this is why in Ohio you could only be eligible for nursing home services if you had less than $1,500 rather than the SSI standard of $2,000.
Spend Down
States that chose this 209(b) option were required to allow individuals to “Spend Down” to the income limit set for Medicaid recipients. The law also put in place some restrictions around “incurred” expenses for Spend Down. This means that if a person had income which was too high, they could show they spent down their own money on certain medical costs, and then they would become eligible for Medicaid.
To meet the spend down requirement, a person could show recurring expenses which brought them under the income requirement, they could “pay in” to become eligible (that is, pay Medicaid the amount they were over, and then Medicaid would begin coverage, or they had the option of accumulating costs, grouping them into certain months, and then they would become eligible during those months.
The 1634 migration gets rid of the spend down calculation or collection. Ohio felt that there was an unfairness in the spend down system In one statement put out by Ohio Department of Medicaid (ODM), the agency indicated that “A person under 65 without Medicare can get MAGI adult coverage with income up to 138% FPL (Federal Poverty Level*). A person 65 or older, or with Medicare, has to Spend Down to 64%.” They continued, “Two people with the same Spend Down amount may have very different results based on what treatment they need from what provider – in one case, the provider never actually attempts to collect on the “incurred” bill. In another case, the person has to pay up front to get services.”
Income Caps
For nursing home residents, the biggest concern is the “Income cap.” Ohio never capped the amount of in come a person could have, they just required the funds be spent down under that amount. For example, if you had $4,000 a month in income, and had $8000 per month in medical bills, the recurring $8000 costs would negate the income received. There would be eligibility.
Not now. Ohio Is no an “income cap” state, and anyone with monthly income of $2200 or more is not eligible for Medicaid. How do we get around this? Next time we will discuss this, answering that question and also asking: What is a QIT and why do I need one?