Two-Step Eligibility Process for Persons in Long Term Care Facilities

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07/02/12

Summary:

  • A two-step process is introduced for financial eligibility determination and income budgeting for persons in long term care facilities;
  • The initial step determines financial eligibility for medical assistance, using the AABD community medical standard. After eligibility has been established, income is budgeted in a second post-eligibility step;
  • This change is made because federal regulations require that all similarly-situated clients have eligibility determined the same way.

Two-Step Eligibility Process

A two-step process is introduced for financial eligibility determination and income budgeting for the first whole month in a long term care facility and for redeterminations or changes in income. This initial step determines financial eligibility for medical assistance, using the AABD community medical standard. After eligibility has been established, including meeting spenddown if applicable, income is budgeted in a second step.

This change is made because federal regulations require eligibility to be determined the same way for all similarly-situated applicants. 

Step 1: Determine eligibility using the AABD community medical standard.

Determine financial eligibility for a resident of a nursing home or SLF by comparing non-exempt income, minus the $25 income exemption and any earned income exemption or employment expenses, to the AABD community standard for one person. Use a one-month eligibility period. Resources are not used in this step.

  • If non-exempt income after exemptions is less than or equal to the AABD community standard, the person is eligible with a regular (non-spenddown) case. Proceed to Step 2 to budget income.
  • If non-exempt income after exemptions exceeds the AABD community standard, the case is spenddown. The amount of the spenddown liability is the difference between non-exempt income after exemptions and the AABD community standard. Long term care charges anticipated for the month can be applied to meet the spenddown.
  • If anticipated long term care charges for the month at the state payment rate, plus any other applicable medical expenses, meet or exceed the spenddown liability amount, spenddown is met and the person is financially eligible. Proceed to Step 2 to budget income.
  • If anticipated long term care charges for the month at the state payment rate, plus any other applicable medical expenses, total less than the spenddown liability amount, spenddown is not met and the person is not financially eligible. Enroll as an unmet spenddown case; do not budget income as in Step 2.

Step 2: Budget income using LTC deductions (post-eligibility process).

After eligibility has been established in Step 1, determine the person's total countable income:

  • The total gross non-exempt income used in Step 1; plus
  • Any exempt or disregarded income which was not used in determining eligibility in Step 1.

From this total, subtract applicable deductions listed in PM 15-04-04, applicable personal allowance ($30 NH Standard or $90 SLF Standard) and any allowable medical expenses, to determine countable income. To this, add any non-exempt resources above the resource disregard to determine the amount the person owes to the facility.

Do not use the $25 income exemption.

The HFS 2500 Nursing Home/Supportive Living Facility Resource Calculation is being revised to include this change.

Examples

Example 1: Income below AABD community standard

Mr. H resides in a nursing home and has monthly income of $910 from Social Security. Mrs. H lives in the community and has gross monthly income of $600 from Social Security and a $500 pension.

  • Step 1: Mr. H's gross income, minus the $25 exemption, is $885, which is below the community standard of $931. He is eligible for medical assistance as a regular (non-spenddown) case.
  • Step 2: Deducting the $30 personal allowance from Mr. H's $910 income leaves $880. Mrs. H has a total of $1,100 income ($600 + $500 = $1,100) which is $1,639 less than the CSMNA of $2,739. Mr. H can therefore divert all of his remaining $880 to her. He has no available income remaining to pay the nursing facility.

Example 2: Spenddown met by LTC charges

Mr. I resides in a nursing home and has a total of $4,000 gross monthly income from Social Security and a pension. The LTC charges are projected to be $140 per day at the state payment rate. Mrs. I resides in the community and has a total of $1,000 gross monthly income.

  • Step 1: Mr. I's gross income of $4,000 minus the $25 income exemption equals $3,975. Compare this to the community standard: $3,975 - $931 = $3,044. Mr. I has a spenddown of $3,044. The spenddown is met by the LTC charges of $4,200 for the month (30 days x $140). Mr. I is eligible for medical assistance.
  • Step 2: Mr. I has $4,000 monthly gross income. Deducting his $30 personal allowance leaves $3,970. Mrs. I is eligible for $1,739 ($2,739 - $1,000) in additional income as the CSMNA, so Mr. I can divert $1,739 to her.
  • If Mr. I has no medical expenses, or any of the other deductions listed in PM 15-04-04, he will owe $2,231 ($3,970 - $1,739) to the LTC facility.

Example 3: Spenddown not met by LTC charges

Same as above, except that the state payment rate is $90 per day, or $2,700 per month.

  • Step 1: Mr. I's spenddown of $3,044 is not met. Enroll the case as unmet spenddown and take no further action at this point. Do not proceed to budgeting in Step 2.
  • Later: Mr. I brings in a medical receipt for $400. This, with the $2,700 LTC charges, meets the spenddown; proceed to Step 2.
  • Step 2: Mr. I has $4,000 monthly gross income. Deducting his $30 personal allowance, $1,739 diverted to Mrs. I as the CSMNA, and the $400 medical expense leaves countable income of $1,831, which is the group care credit.

Example 4: Earned income

Ms. L resides in a nursing facility and works part-time in supported employment. She has income of $420 from Social Security and $95 earned income from a workshop. Her employment expenses total $32 for the month. Ms. L has no spouse or other dependents in the community. She presents $120 of allowable medical expenses for the month.

  • Step 1: Figure Ms. L's total non-exempt income:
    • $95 - $50 earned income exemption - $32 employment expenses = $95 - $82 = $13;
    • $420 SSA income + $13 net earned income = $433; $433 - $25 exemption = $408;
    • $408 is less than the standard of $931; Ms. L is eligible as a regular (non-spenddown) case.
  • Step 2: Budget income:
    • Total gross income is $420 + $95 = $515.
    • Allowable deductions are $30 personal allowance, $50 earned income exemption, $32 employment expenses and $120 medical expenses; $30 + $50 + $32 + $120 = $232.
    • $515 - $232 = $283. Ms. L owes $283 to the facility.

Example 5: Excess resources

Mrs. M has been private pay through the month of June 2012; eligibility is being determined beginning with the month of July 2012. She has a savings account totaling $3,000. She has income of $900 per month in Social Security benefits, no spouse in the community, and no other medical expenses besides the LTC charges, which are $100 per day at the private rate and $80 per day at the Department rate.

July 2012

  • Step 1: Deduct the $25 exemption from Mrs. M's $900 income; this leaves $875. This is less than the AABD MANG standard of $931; Mrs. M is eligible. Post-eligibility rules apply.
  • Step 2:
    • Excess resources ($3,000 - $2,000 allowable resources = $1,000 excess resources). Before her income is considered, Mrs. M has a $1,000 resource spenddown;
    • Income: $900 - $30 personal allowance = $870. Mrs. M has $870 monthly income to pay for her care;
    • $1,000 resource spenddown + $870 available income = $1,870;
    • Mrs. M has $1,870 available to pay the facility for July. 

August 2012

No excess resources are available this month; the excess was used in full in July. Mrs. M has only $900 - $30 = $870 available to pay the facility for this and future months.


[signed copy of file]

Michelle R.B. Saddler

Secretary, Illinois Department of Human Services

Julie Hamos

Director, Illinois Department of Healthcare and Family Services