WAG 13-01-05-a: Allowable Medical Expenses

PM 13-01-05-a

new manual textVerify Allowable Medical Expenses

Medical expenses totaling $35 or more must be verified to allow as a deduction. Use documentary evidence as the primary source of verifications. Documentary evidence consists of a written confirmation of the household's medical expenses. Examples of acceptable documentary evidence include:

  • Bills or statements from providers of health insurance, services, and products.
  • Health insurance policies that clearly describe the areas of coverage.
  • Acceptable verification is not limited to any single type of document and may be obtained through the household or other sources. Accept any reasonable documentary evidence provided by the household as long as the verification adequately proves the customer's statements on the application.
  • Document in Case Comments all medical expenses that were used to determined that the medical expense total exceeds $35 which qualifies the customer to the Standard Medical Deduction expense. Case Comments should include:
    • the household members entitled to the Medical Expense Deduction; 
    • which expenses are allowable and not allowable; 
    • treatment of reimbursements, when the verification for reimbursement was received, or verification that reimbursements are not applicable;
    • the determination to average and the time periods over which the expenses have been averaged;
    • any noncooperation by the household, or the nonreceipt of any requested verification;
    • the determination that information provided by the household appeared incomplete, inaccurate, inconsistent, or outdated;
    • if verification received from someone outside of the household was inconsistent with the household's statements, document why the information was considered inconsistent and how the issue was resolved;
    • if the household reports an expense but chooses not to have it included as a deduction, that fact should be documented;
    • if a household needs to provide missing verification, document the date verification was requested and the type of verification needed. Document the date verification was received. If the household does not provide the verification, document that fact to support subsequent action.
  • If the customer was previously allowed medical expenses in the prior certification but does not have expenses at REDE or Mid-Point Report, end date the old expenses and document in Case Comments.

new manual textMissing Verification

If the customer does not have verification at the interview, offer to assist the household in obtaining required verification:

  1. Give Form 267, Verification Checklist, to the customer and allow 10 calendar days to provide the missing verification; and
  2. Document in Case Comments when assistance is offered to the customer.
  3. If verification is not provided within the 10 calendar days, determine benefits without allowing a deduction for the unverified medical expense. Document in Case Comments. If verification is provided later, treat the information like the household reported a change in circumstances.

new manual textExpedited Service

  • A SNAP household entitled to expedited service is entitled to a medical expense deduction, if they list medical expense amounts on the application, even if verification of those expenses is postponed. Verification must be provided prior to the second month's issuance, or by the third month (regular roll) of participation, if the household applied after the 15th of the month and was assigned a 2 month or longer certification period.
  • If the amount of an allowable expense is not known at this time or cannot be reasonably anticipated based upon available information about the customer's medical condition and public or private medical insurance coverage, consider the nonreimbursable portion of the medical expense only when the amount of the expense or reimbursement is reported and verified.
  • If the household does not want to deduct an expense, the expense becomes nondeductible (not allowed) and is not included in any SNAP calculation of net income. If the household later reports or verifies the expense, treat the information like the household reported a change in circumstances.

new manual textCollateral Contact

  • Whenever documentary evidence cannot be obtained by the customer or is insufficient to make a determination of eligibility for the deduction or the amount of the deduction, a collateral contact may be made. Documentary evidence may be considered insufficient when the household presents bills that do not represent an accurate picture of the household's medical expenses (such as old bills).
  • Assist the customer in verifying the information that is needed to determine eligibility through a collateral contact. A collateral contact is an oral confirmation of the household's expenses by a person outside of the household. The collateral contact may be made either in person or over the telephone. Examples of collateral contacts for medical expenses include:
    • billing personnel in the doctor's office or the hospital;
    • insurance agents;
    • nursing home or home health care providers;
    • medical equipment rental agencies.
  • When information obtained from a source outside of the household contradicts statements made by the customer, allow the customer the opportunity to resolve the discrepancy prior to using the information to determine benefits. Document in the Case Comments any information obtained from collateral contacts as well as how any discrepancies are resolved.

new manual textDeciding What to Allow as a Medical Expense

new manual text

Follow the steps below to determine if a medical expense is allowed.

See PM 13-01-05-a, PM 13-01-05-e, WAG 13-01-05-e

1 Is the expense for medication, medical supply, equipment, or service prescribed or approved by a State licensed or qualified health practitioner? Yes, continue to Question #2. No, do not allow the expense
2. Is the expense for a special diet or an item that can be otherwise purchased with SNAP benefits see (PM 13-01-05-e)? No, continue to Question #3. Yes, do not allow the expense
3. Is the expense a Schedule I controlled substance, such as medical marijuana? No, continue to Question #4. Yes, do not allow the expense.
4. Is the expense CBD oil, approved or prescribed by a licensed practitioner or qualified health professional with a delta 9 tetrahydrocannabinol (THC) concentration that exceeds 0.3 percent on a dry weight basis? No, allow the expense. Yes, do not allow the expense.

revised manual textUsing the Standard Medical Deductions

  1. (Worker) Verify allowable medical expenses exceed $35 and determine whether the SNAP unit is entitled to the $485 or $200 standard. 
  2. (Worker) In Data Collection, on the Questions - Expense page, answer Yes to "Does anyone in the case have medical expenses?"
  3. (IES) Records the response to the medical expense question. When answered Yes, IES adds the appropriate pages to the Driver Flow.
  4. (Worker) Follow the Driver Flow. Enter medical expenses on the Medical Expenses Page.
  5. (IES) Deducts allowable medical expenses in excess of $35 incurred by the qualifying member.
  6. (Worker) Document verified expenses in the Case Comments.

revised manual textUsing Actual Medical Expenses Instead of a Standard Medical Deduction

  1. (Worker) Verify allowable medical expenses exceed $35 and determine whether the SNAP unit's actual medical expenses exceed the $485 or $200 standard. 
  2. (Worker) In Data Collection, on the Questions - Expense page, answer Yes to "Does anyone in the case have medical expenses?"
  3. (IES) Records the response to the medical expense question. When answered Yes, IES adds the appropriate pages to the Driver Flow.
  4. (Worker) Follow the Driver Flow. Enter allowable medical expenses incurred by the qualifying member. Include cents for the individual expenses. 
  5. (Worker) Indicates if customer opts for the use of the medical standard or actual expenses. IES will automatically apply the medical standard if an option is not indicated.
  6. (IES) Deducts allowable medical expenses in excess of $35 incurred by the qualifying member.
  7. (Worker) Document all reported allowable medical expenses in the Case Comments.

new manual textAdding New Medical Expenses When Conversion Expenses Exist

At conversion, if a SNAP case was marked in Legacy as receiving the Standard Medical Deduction for SNAP, a medical expense of $245 was converted to IES. When adding medical expenses to a case, check to see if an existing medical expense is on the case from conversion. The medical expense from conversion should be end dated when adding new expenses that should be applied toward the Standard Medical Deduction for SNAP. If both the converted expense and the new ongoing expense are both on the case for SNAP budgeting, the expenses will be added together causing potential over issuance of SNAP benefits.

This may occur if the:

  • SNAP household did not complete a redetermination (REDE) after conversion and are now reapplying for benefits; or
  • completed the REDE after conversion but the converted expense was not end dated when the new medical expenses were added.

Follow the procedures below:

  1. At application, MPR and report of change, check the Medical Expense Page for "Other Allowable Expense" for a total of $245.
  2. Check to see if existing "Other Allowable Expense" on the Medical Expenses page comes from conversion by looking at the expense details. Using the "silhouette" icon in the top icon bar should show a user id of "CV20171013" or similar for data created by conversion. The circumstance dates will also be 10/01/17.
  3. If this expense is from conversion, end date the expense for the end of the month prior to the new expense starting. Example: If adding a medical expense to start 08/01/19, the Other Allowable Expense needs to be end dated for 07/31/19.
  4. Add the new expense as normal by using the "+Add Medical Expense" button. If the expense is over $35 and under $200, the new Standard Medical Deduction of $200 will be applied automatically in the eligibility screens.
  5. After eligibility is run, check the SNAP EDG for Net Income Budgeting. The Medical Deduction should not exceed $200 unless there are separate expenses from postconversion that together total more than $200.

Attendant Care Expense

If a SNAP unit incurs attendant care costs for an incapacitated person of any age that could qualify under both the medical deduction and dependent care deduction, the costs may be deducted as a medical expense or a dependent care expense, but not both. Discuss the options with the customer and determine which option is most beneficial to the SNAP unit.

Example 1:  The SNAP household incurs a $600 monthly expense for an incapacitated member who has an attendant come to their home daily while others in the home work. There are no other medical expenses for this individual. The SNAP household has the option of using the expense as a dependent care deduction or as a medical expense deduction. Since the $600 expense is more than the Standard Medical Deduction of revised manual text$200 the household can choose to use the actual medical expense amount as a medical deduction. However, if allowed as a medical expense deduction the amount used in the SNAP calculation is $565 = (600-35). The entire $600 may be deducted in the SNAP calculation as a dependent care deduction. The HSC discusses these options with the customer.

Example 2: The SNAP household incurs a $35 monthly expense for an incapacitated member who has an attendant come to their home one day a week for a couple of hours while others in the home are at work. There are no other medical expenses. Since the expense does not exceed $35 the individual does not qualify for the medical standard. The entire $35 may be deducted as a dependent care deduction. The HSC discusses this option with the customer during the interview.

Example 3: The SNAP household incurs a $100 monthly expense for an incapacitated member who has an attendant come to their home during the day while others in the home work. There are no other medical expenses. Since the $100 exceeds $35 the individual qualifies for the Standard Medical Deduction revised manual text$200. The amount used as a medical deduction in the SNAP calculation is $165 = (200-35). If this expense is used as a dependent care expense only $100 would be deducted in the SNAP calculation. The HSC discusses these options with the customer during the interview and informs them of the best option.

Example 4: The SNAP household incurs a $500 monthly expense for an incapacitated member who has an attendant come to their home during the day while others in the home work. The incapacitated member also has monthly RXs of $50. The household may choose to use all expenses as a medical deduction $515 = (550-35) or the household may choose to use the $500 as a dependent care deduction. Since the $50 RX costs exceed $35 the household qualifies for Standard Medical Deduction revised manual text$200. The total deduction for household in the SNAP calculation is $665 (200-35 = 165+ 500). The HSC discusses these options with the customer during the interview and informs them of the best option.

new manual textHealth/Hospitalization Insurance Policies

  • Premiums paid for insurance policies are allowed as a medical expense if intended to cover medical expenses.
  • Only the portion of a medical insurance premium assigned to the elderly or disabled household member may be considered when calculating the deductible amount. If the policy does not specify how much of the premium is for each household member, prorate the premium amount among all household members. Only the prorated amount for the eligible member would be considered a deduction.
  • If the policy holder is not elderly or disabled, but the family policy includes a qualifying member who is eligible for the medical expenses deduction, that part of the premium for the qualifying member may be used in calculating the deduction.
  • Insurance policies that pay a household a specific amount of money for each day a person is in the hospital are only allowable expenses if the policy states that the money received from the policy is intended to be used to cover medical expenses and it is reasonably expected that the household will use the money to pay for medical bills and not for everyday living expenses.

new manual textPayments on Loans and Credit Card Interest

Medical Expenses on Credit Cards

Medical expenses paid on a credit card are allowable and considered paid when listed on the charge account statement. The interest may not be included as a deduction.

Payments on Loans for Medical Expenses

 A medical expense deduction for payments made on a conventional loan when the loan is used to pay a one time only medical expense is allowable as a medical expense. Loan expenses (such as interest) are not allowed as part of the deduction. If a household obtains a mortgage for the purpose of financing a large medical expense, the mortgage payments should be treated as shelter costs and are not deductible as medical expenses.