1. What is the Medicaid Buy-In program?
It’s a program that allows people of any age who have a disability and are earning a paycheck to receive Medicaid by paying a monthly premium. The monthly premium is based on earned and unearned income.
2. What is the Income Pre-Test and the disability requirement?
Income Pre-Test: To be eligible for the Medicaid Buy-In program, a person’s earnings and FICA contributions must be enough in a calendar quarter to count as a Social Security Administration “qualifying quarter.” This amount is $1,090 a quarter.
A Social Security Administration qualifying quarter is a three-month period that ends on March 31, June 30, Sept. 30 and Dec. 31 each year.
Disability: If a person receives disability benefits from the Social Security Administration, they automatically meet the disability criteria for Medicaid Buy-In. If a person applying for Medicaid Buy-In is not receiving disability benefits from the Social Security Administration, HHSC’s Disability Determination Unit will process the application using Supplemental Security Income (SSI) criteria without consideration of earned income.
A person’s countable resources must be equal to or less than the SSI resource limit of $2,000. The most common countable resources are cash on hand, money in a bank account , stocks, bonds, life insurance with cash value, a second vehicle, and property other than a homestead.
Several types of resources are not considered when determining eligibility:
- Retirement-related accounts such as IRAs, 401(K)s, Tax Sheltered Annuities (TSAs), and Keoghs that comply with Internal Revenue Service regulations.
- Resources set aside as part of a Plan to Achieve Self-Support (PASS), as long as the plan is in effect and it has been approved by HHSC. Any money set aside for a PASS must be identifiable from other funds.
PASS resources are considered “set aside” when they are one or more of the following:
- Owned by the individual.
- Used to pay for expenses.
- Used directly in the job.
- Saved for future expenses.
- Independence Accounts.
An Independence Account is a designated, segregated account in a financial institution used to save for future health care and work-related expenses for the purpose of increasing a person’s independence and employment potential. A person may deposit up to 50 percent of their gross earned income during a Social Security Administration qualifying quarter into the account. The funds in this account may only be used to pay for health care or work-related expenses.
If the person puts more than 50 percent of their gross earnings into an Independence Account or if the money is used for anything other than to pay for health care or work-related expenses, the money in that account will be considered a countable resource. This resource will be counted in the 12 month period beginning with the first month after the Social Security Administration qualifying quarter in which a person deposits more than 50 percent of their gross earnings or uses the funds to pay for anything other than health care or work-related expenses.
Each person is considered a household of one when applying for the Medicaid Buy-In program.
If the person applying is married to someone who is eligible for Medicaid, that person and his or her spouse are each considered a household of one.
Being a household of one means a spouse is not penalized for assets owned by the other spouse. For example, if a husband applies for the Medicaid Buy-In program, only his assets are considered when determining his eligibility for the program. If both spouses own the asset, only half of the asset is considered owned by the husband and the other half is considered owned by the wife.
If the person applying for the Medicaid Buy-In program is a minor and lives with his or her parents, the assets of the parents are not considered the minor’s assets.
To be eligible for the Medicaid Buy-In program, a person’s countable earned income must be less than $2,167 a month, which is 250 percent of the federal poverty level. All earned income is countable except for the following exclusions, which are applied in the order listed:
- Earned income tax credit payments and child tax credit payments.
- Up to $30 of earned income in a month, if it is infrequent or irregular.
- Earned income of blind or disabled student children, subject to a monthly and yearly limit. The monthly limit is $1,640 and the yearly limit is $6,600.
- $20 monthly general income exclusion.
- $65 monthly earned income exclusion.
- Earned income used to pay Impairment-Related Work Expenses (IRWE).
The amount of Impairment-Related Work Expenses that can be deducted are subject to reasonable limits. Deductions for needed items and services will be made only if the person pays the cost.
The cost of certain items and services that a person with disabilities under age 65 uses to help them work can be deducted from earnings as Impairment-Related Work Expenses, even though such items and services also are needed for normal daily activities.
The cost of certain attendant care services, medical devices, equipment, prosthesis, and similar items and services may be deducted as Impairment-Related Work Expenses.
The costs of routine drugs and routine medical services are deductible as Impairment-Related Work Expenses if the drugs or services are necessary to control the disabling condition, allowing the person to work.
Expenses that are not directly related to the impairment(s) cannot be deducted as Impairment-Related Work Expenses. Examples of non-deductible items include:
- Routine annual physical examinations.
- Routine optician services (unrelated to a disabling visual impairment).
- Routine dental examinations.
- Health and life insurance premiums.
Continuing with the list of earned income that may not be considered in the eligibility calculation on a Medicaid Buy-In application:
- One-half of remaining earned income.
- Earned income of people who are blind used to meet work expenses, known as Blind Work-related Expense (BWE).
- Any income that is set aside and used to fulfill an HHSC-approved Plan to Achieve Self-Support. This income is excluded from countable income as long as the plan is in effect.
Income is considered “set aside” when it is used to pay for expenses already incurred or when it is saved for future expenses. Any income set aside must be identifiable from other funds, especially when funds are being saved for a future use.
A person may not set aside more income than the Plan to Achieve Self-Support allows. There is no limit to the number of Plans to Achieve Self-Support a person can have, but a person can have only one Plan to Achieve Self-Support at a time.
A person may have Blind Work-related Expenses, Impairment-Related Work Expenses and a Plan to Achieve Self-Support at the same time, but each must be for different expenses.
The monthly premium amount is based on both unearned and earned income as follows:
- Unearned Income:
The unearned income premium amount is all unearned income over the SSI federal benefit rate, which is $674 a month.
Example: Fred’s total unearned income is $945 a month
|Fred’s unearned income||$945|
|SSI federal benefit rate||-$674|
|Unearned Income Premium Amount||$271|
- Earned Income:
All program participants whose net pay (gross income, minus mandatory payroll deductions) exceeds 150 percent of the federal poverty limit (FPL) are required to pay an amount based on their earned income. Earned income premium amounts are as follows:
|Earnings above 150% FPL up to and including 185% FPL
(greater than $1300 up to including $1604)
|Earnings above 185% FPL up to and including 200% FPL
(greater than $1604 up to including $1734)
|Earnings above 200% up to and including 250% FPL
(greater than $1734 up to including $2167)
|Earnings Above 250% FPL
(greater than $2167)
|Fred’s unearned income premium amount||$271|
|Fred’s earned income premium amount||+$20|
|Total Monthly Premium||$291|
- Total Monthly Premiums:
Total monthly premiums range from $0 to $500. Those who are approved for coverage do not pay monthly premiums if their:
- Unearned income is at or below the SSI federal benefit rate, and
- Earned income is at or below 150% FPL.
As of January 1, 2009, total monthly premiums may not exceed $500.
A person who applies for the Medicaid Buy-In program is not enrolled until the first premium is paid. The person applying will receive a notice containing the amount of the premium and the premium due date.
- First Premium Payment: In most cases the applicant has at least two weeks to make the first premium payment.
- Ongoing Premium Payments: Monthly premiums are due the end of each month. If we do not receive payment by the end of the month, that person’s Medicaid Buy-In coverage will be terminated the end of the following month.
If we do not receive payment by the end of the month due date, but we receive a one-month payment before the end of the following month, that payment will be treated as payment for the overdue month. The person will then be notified of the remaining amount due and the deadline for payment.
- If we receive the remaining amount due by the deadline for payment, then that person’s coverage will not be interrupted.
- If the remaining amount due is received after the deadline for payment, the person’s coverage will be terminated and the payment will be refunded to that person.
A person who is removed from the program for failing to make payments must pay all past due and current monthly payments to get back into the program.
Once a person is found to be eligible for the Medicaid Buy-In program, that person is given optional start dates – the dates they can start their Medicaid coverage – and premium amounts for each of the optional start dates.
The person applying can choose a start date up to three months before the application file date by paying the premium amounts for the earliest date that person wants to start coverage. This option is only available at the time of the first payment.
If the person applying for coverage pays the premium only for the current month, that person will not receive medical coverage for any of the prior months of potential eligibility.
If the person applying pays more than one month’s premium, but not enough for all prior months of potential eligibility, then the excess premium amounts are applied in reverse chronological order to each of the prior months until there is only a partial month premium remaining. The partial amount will be refunded to that person.
|John files an application on Jan. 10, 2009.|
|HHSC determines John is eligible for the Medicaid Buy-In program on Feb. 20, 2009 (this is within the 45 days from the time John submits the application that HHSC has to determine eligibility).|
|A letter notifying John that he is eligible is dated Feb. 20 and indicates the premium amount is $200 per month.|
|John’s coverage can start as early as Oct. 1, 2008 – three months before the application was filed. To start coverage on Oct. 1, 2008, John must pay $1,200 by March 31.|
|If John makes a payment of $800 by Feb. 28, the effective date for coverage is Dec. 1, 2008. This is because the $800 is applied as follows:|
|March 2009 (month after notification letter received)
February 2009 (month notification letter received)
January 2009(month application was filed)
December 2008 (one month before application filed)
|If John paid $900, the effective date for coverage would still be Dec. 1, 2008 because the $800 would be applied the same as above and $100 would be refunded back to John.|
- Medicaid services
People in the Medicaid Buy-In program will have access to the same Medicaid services available to adult Medicaid recipients, which include office visits, hospital stays, X-rays, vision services, hearing services and prescriptions. People in the Medicaid Buy-In program will be eligible for attendant services and day activity health services, if they meet the functional requirements for these programs.
If a person in the Medicaid Buy-In program wants to be in one of Texas’ long-term care waiver programs (e.g., Community-based Alternatives), they may get on the waiver interest list. However, a person cannot participate in the Medicaid Buy-In program and receive long-term care waiver services at the same time. If a person in the Medicaid Buy-In program makes it to the top of a waiver interest list, qualifies for the waiver and wants to receive long-term care waiver services, that person must switch from the Medicaid Buy-In program into another Medicaid program in order to enter the waiver program.
- Service delivery models
As of September 2006, Medicaid Buy-In program participants will receive services either through traditional Medicaid (fee-for-service) or through the Primary Care Case Management (PCCM) program, depending on where they live.
|Bexar, Dallas, El Paso, Harris, Lubbock, Nueces, Tarrant, and Travis Service Areas (these counties and surrounding counties)||Traditional Medicaid (fee-for-service)|
|All Counties Outside of the Above Service Areas (including rural Texas)||Primary Care Case Management (PCCM). Each member has a primary care provider|
|Participants in traditional Medicaid and Primary Care Case Management may receive up to three prescriptions per month.|
- In the future, people in the Medicaid Buy-In program will get their Medicaid services through managed care programs, just as those who receive Supplemental Security Income (SSI) and live in certain urban areas do.
An applicant not satisfied with HHSC’s decision concerning eligibility for medical assistance has the right to appeal through the process outlined in the HHSC Fair Hearings and Fraud Handbook.