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Keeping Medicaid after Cash Public Assistance or SSI Benefits Are Terminated
Scenarios: Susie is 49 years old and single, with no children. She has been receiving cash public assistance and Medicaid for three years, while she appeals the denial of Social Security Disability Insurance Benefits ("SSD" or "DIB"). She finally was approved for SSD, and will start receiving $2000/month in SS DIB benefits each month. She will also receive a retroactive benefit of $48,000 because she was found to have been disabled as of two years ago.
Tony is also 49 years old and single, with no children. Like Susie, he was just approved for SS DIB benefits for $1000/month. Before that, he received Supplemental Security Income (SSI) benefits during the five-month waiting period for SS DIB.
This article will explain:
I. Substantive Eligibility after losing PA or SSI --Whether and how Susie and Tony can keep Medicaid once they begin receiving SSD, with tips on keeping Medicaid if their income is now above the Medicaid income limits.
B. Summary of Eligibility rules for "DAB" - Disabled-Aged-Blind (Non--MAGI)
I. SUBSTANTIVE ELIGIBILITY -- Because Medicaid treats different "categories" of people, and their resources and income, differently, an individual may still be eligible for Medicaid even after public assistance or SSI terminates, and their income is higher.
A.. Medicaid uses two main sets of rules for counting income and resources for three broad categories of people:
RESOURCES -- Because of recent changes in New York law, adults in all 3 categories may have the same amount of resources (bank accounts, etc.). These limits ($13,800 for one person, $20,100 for a couple) are much higher than for either SSI or PA cash assistance. The rules for counting these resources, however, are very different for each of the 3 categories. This RESOURCE chart compares the different Medicaid rules for counting resources for the three basic categories of recipients.
INCOME -- The income limit for "DAB" category people is slightly higher than the SSI limit and also higher than that for the Singles/Childless Couple (S/CC) Medicaid category. Compare Box 7 on the Medicaid Eligibility chart (Singles/Childless Couples) with Box 3 for DAB category (Disabled, Aged 65+ or Blind). Chart is explained at this link. As true for resources, the rules for counting income are very different for DAB compared to those for PA recipients (S/CC category), and in some important ways different than for SSI beneficiaries. This Income Chart compares the different Medicaid rules for counting income for the three basic categories of recipients.
B. Summary of the Eligibility Rules for Medicaid in the DAB (Disabled/Aged 65+/Blind) Category Compared to PA or SSI
Medicaid allows a couple to have $20,100, compared to the SSI limit of $3000 (2009). Medicaid allows a single person to have $13,800, compared to the SSI limit of $2000 (2009)
D. If the individual's public cash assistance is terminated for reasons OTHER than being approved for SS Disability benefits, or SS Retirement benefits at age 65, such as increased earnings, Unemployment benefits, Social Security Retirement benefits (under age 65), and the individual is not Disabled, Aged 65+ or Blind, then the special DAB rules for budgeting income and resources do not apply. See rules for Singles/Childless Couples on INCOME chart and RESOURCE chart. The income and resource limits in Box 7 of the HRA Medicaid Eligibility chart apply, but the individual may not spend down to these limits.
A. Legal Authority Requiring Medicaid Program to Continue Medicaid While Re-determining whether a Former SSI/PA Recipient is Eligible for Medicaid
Since Medicaid is an entitlement, Medicaid cannot be terminated without a determination that a Medicaid recipient is ineligible. An individual may no longer be eligible for one "category" of Medicaid, i.e. Medicaid that automatically is provided to an SSI recipient or to someone who was poor enough to qualify for cash assistance, but still may qualify under another category of eligibility. A local Medicaid program must continue Medicaid as originally authorized with SSI or cash assistance while it determines whether an individual continues to be eligible for Medicaid-only when a change of circumstances occurs, such as a change in income or resources, or in the "category" of eligibility. This procedure is sometimes called the Stenson or Rosenberg procedure after two federal court cases.
This rule is now in federal and state regulations. 42 CFR § 435.930(b) ["The agency must . . . (b) Continue to furnish Medicaid regularly to all eligible individuals until they are found to be ineligible"]; 18 NYCRR § 360-2.6(b) ["If a recipient's ADC, HR [Safey Net Assistance], SSI, or Title IV-E case is discontinued, MA will be continued until the social services district determines the recipient to be ineligible for MA. The district must determine the recipient's continuing eligibility no later than the end of the calendar month following the month in which the recipient was determined ineligible for ADC, HR, SSI, or Title IV-E"]. See also 18 NYCRR § 360-2.2(a)(2) ["Persons determined to be ineligible for ADC or HR will have their MA eligibility determined separately, unless they have stated in writing that they do not want their MA eligibility determined."]
The federal Medicaid agency, the Centers for Medicare & Medicaid Services (CMS), has reiterated the applicability of Stenson as requiring ex parte determinations of Medicaid eligibility when cash assistance or SSI is terminated. See Letter to State Medicaid Directors dated April 22, 1997 and Continuing the Progress: Enrolling and Retaining Low-Income Families and Children in Health Care Coverage which provides, in pertinent part:
Exhaust All Possible Avenues of Coverage. Similar to the rules relating to initial eligibility determinations, States may not terminate Medicaid eligibility unless they have affirmatively explored and exhausted all possible avenues to Medicaid eligibility. States may not determine eligibility for some categories and require families to reapply in order to determine eligibility for other categories. ...
The extent to which and the manner in which a State must explore other possible categories will depend on the circumstances of the case and the information available to the State. For example, if the State has information in its Medicaid files (or other available program files) suggesting an individual is no longer eligible under the poverty-level category but potentially may be eligible on some other basis (e.g., on the basis of disability or pregnancy), the State must consider eligibility under that category on an ex parte basis without requiring the family to reapply.
If the ex parte review (i.e., a review based on information available to the State) does not establish eligibility under any category, the State must provide the family or individual a reasonable opportunity to provide information to establish the potential bases for ongoing Medicaid eligibility, including disability or pregnancy. A State does not have to maintain coverage unless the individual has provided some reasonable indication that he or she may be eligible under some other basis.
B. How it Works in Practice - Transition from PA or SSI to Medicaid-Only
The requirement for continuation of Medicaid until a separate redetermination is made after cash assistance or SSI is terminated is in the NYS Dept. of Health Medicaid Reference Guide, in the Categorical Factors section at pp. 47-48.
1. Rosenberg Notice and Procedure - cash public assistance
Before Medicaid is terminated, a person losing cash assistance should receive THREE NOTICES.
NOTICE 1 -- The Rosenberg Notice terminating cash public assistance benefits includes this statement, at page 3: "While we determine whether you are still eligible for Medical Assistance, we will continue Medical Assistance coverage unchanged for: [names of individuals]. .. We will soon write to you asking you for information we need to determine your continuing eligibility for Medical Assistance. If you do not respond when we write, your Medical Assistance may be closed at that time." See also DOH's Informational Letter "Medicaid Determinations When Public Assistance is Denied or Closed or the PA Application is Withdrawn"
NOTICE TWO -- As the first notice -- the Rosenberg notice -- states, the local district is supposed to contact the recipient to ask for further information if necessary to make this determination. The written request for more information would have a deadline to submit the requested documentation.
A person whose SSI is discontinued will receive three notices - one from the Social Security Administration (SSA) and two from the Medicaid program.
NOTICE ONE from SSA - The SSA sends a notice of discontinuance of SSI, which states the right to request a reconsideration within ten days of receiving the notice. The recipient does not have to request a reconsideration with the SSA in order to continue receiving Medicaid.
NOTICE TWO -- "Stenson" Notice from MEDICAID PROGRAM -- This notice addressed to "Dear Former SSI Beneficiary" instructs the recipient to complete an enclosed recertification form [NYC form W296-E can be downloaded as part of this document) and mail it in an enclosed self-addressed envelope within two weeks, with requested documentation, if the individual wants to continue receiving Medicaid. Documentation includes:
NOTICE THREE-A--MEDICAID DENIAL If the recipient does not comply with the deadline to recertify in the Stenson or Rosenberg notice, then a Notice of Discontinuance for Failure to Renew/Recertify is sent. This notice must be sent at least 10 days before the closing date, with the right to receive Medicaid as "aid continuing" if a hearing is requested within that 10 days, and a right to a hearing without Medicaid aid continuing if the hearing is requested within 60 days but not within 10 days. The issue in a hearing requested on this notice would be whethe or not the individual recertified eligibility as required by the Stenson or Rosenberg notice.
NOTICE THREE-B -- MEDICAID APPROVAL with a Spend-down -- If recipient does timely complete the Stenson or Rosenberg recertification process, but now has income above the Medicaid limit, she will receive a Notice of Decision on Your Medical Assistance. In the sample notice, the recipient, who presumably formerly had no spend-down, is told that her Medicaid is being "discontinued" on a specified effective date, which is at least 10 days after the date of the Notice. The notice tells her the amount of her "excess income" (spend-down) and explains how it is calculated. The notice states that "If you have incurred or paid medical bills in an amount equal to or more than" the amount of the excess income, s/he must bring them to the Medicaid office before the effective date of the Notice. By submitting these bills, she would "meet" the spend-down and retain Medicaid coverage for that month. If she does not submit bills that meet the spend-down within the time stated on the Notice, or request a hearing before the effective date of the Notice, Medicaid will be discontinued. SEE Tips on Spend-down below.
C. Tips on keeping Medicaid when income of a former SSI or PA recipient is now above the Medicaid income limits, or when the procedures break down
EXAMPLE: Spend-down is $667/month. Client has an old hospital bill from four years ago before she was on Medicaid. It is $25,965. This bill can be submitted to obtain 49 months of Medicaid. Only six months will be authorized at a time, but then the "carryover" will be used to authorize six additional months until the bill is used up. See sample Notice for this very case, for a client who lost SSI when she was approved for SSD.
During the Stenson and Rosenberg recertification processes, Medicaid notices and staff do not adequately inform the client that they may use past unpaid medical bills to meet their current spend-down. Also, many Medicaid workers still don't know about the Medicaid Buy-In for Working People with Disabilities or 1619(b) or DAC. See, e.g. Notice of Decision on Your Medical Assistance
a. RECERTIFICATION TIP: During the recertifications, if your client has a spend-down,
* SUBMIT all past unpaid bills, and recent paid bills, for them and their dependents, and explain how the bills meet the spend-down.
* If client is working, or can work even just an hour a month, advocate for eligibility for
* If client is a Disabled Adult Child, advocate for Medicaid as above.
b. HEARING TIP: If client receives the above Notice of Decision finding her eligible with a spend-down, even if the spend-down calculation is correct, ASK FOR A HEARING if your client did not submit past unpaid or paid medical bills that could meet her spenddown. Claim that the Medicaid program failed to explain adequately her right to meet the spend-down with these bills. This is the claim made in the hearing for the client who received this sample Excess Income Program Decision -- this notice was issued by the Fair Hearing compliance unit after the hearing decision directed a redetermination of her eligibility.
c. GLITCH TIP: If Medicaid is discontinued without having received either the Stenson or Rosenberg notices (Notice 1) or Notice TWO, then request a hearing and ask for Aid Continuing. Aid continuing must be granted if no notice was provided. This will at least reinstate Medicaid coverage while you try to submit a re-determination package to the local DSS --in NYC it's the Medicaid Separate Determination Unit or, if necessary, while you have client re-apply at a regular Medicaid office. The issue of the hearing would be failure to comply with the Rosenberg or Stenson notices and procedures and to give the opportunity to have Medicaid eligibility re-determined after public assistance or SSSi was terminated.
c. Supplemental Needs Trusts -- If client has no medical bills to meet the spenddown, or used them up, consider enrolling her in a pooled trust or setting up her own Supplemental Needs Trust if under age 65. A person determined to be "disabled" may deposit his or her spend-down into an SNT and eliminate the spend-down. See Overview - Supplemental Needs Trusts and Using a Pooled SNT to eliminate the Medicaid spend-down.
The SSD or SSI lump sum is disregarded (exempt) for nine months following the month of receipt. See Resource chart p. 6. When the recipient responds to the Stenson notice with bank statements that show that resources are now above the Medicaid limit and the recipient received an SSI/SSD lump sum in the last nine months, be sure to attach the SSA Award Letter awarding the lump sum, and explain that the nine months has not yet elapsed.
A. MEDICAID prescription drug coverage is excellent coverage. If client is able to keep Medicaid as described through the procedures above, then that is the optimal solution. If client has too high a spend-down to keep Medicaid on an ongoing basis and is not financially able to join a pooled trust, here's how s/he can obtain help for cost of prescription drugs.
1. If client has Medicare as well as Medicaid ("Dual eligible)"-- Medicaid will assign her to a Medicare Part D drug plan, if she's not enrolled already. When Medicaid auto-assigns a client to a Medicare Part D plan, it is done at random. Hence, just because the client was autoenrolled in a Medicare Part D plan, does not necessarily mean that this is the plan that will cover all her medications with the least utilization management (restrictions). See How to choose a Medicare Part D Plan. Until this assignment is made, she can use Medicaid for her prescriptions. By having Medicaid, she will automatically be enrolled in "Extra Help," the subsidy that makes Part D somewhat affordable. See Pathways to Extra Help and Medicare Part D materials.
People with Medicare Part D who can obtain even one month of Medicaid coverage, using medical bills, will benefit. The "Extra Help" Part D subsidy will continue for the entire calendar year, and even for the following calendar year, if her Medicaid coverage was in August or later.
People who became eligible for Medicare Part D, while on Medicaid, will qualify for the "Extra Help" Part D subsidy either for that remaining year and/or the following calendar year even if their Medicaid is terminated.
2. If client does not yet have Medicare and is in the 2-year waiting period and under age 65-- using past unpaid medical bills to qualify for Medicaid becomes even more important. The client described above, who received this sample notice, was able to obtain Medicaid, despite a high spenddown, for the entire 2-year waiting period, using past bills.
B. Not eligible for Medicaid -- New York State Prescription Saver (NYSPS) Card Program
The NYSPS Card Program is a pharmacy discount card program that began on April 1, 2009. It is designed for individuals who are under age 65 and would not be eligible for EPIC. This program is available to individuals ages 50 to 65 and to individuals of any age under the age of 65 who are disabled. Applicants must be New York residents and cannot be receiving full Medicaid. Individuals are eligible with incomes less than $35,000 per year and couples must have income less than $50,000 per year. For more information on this program and to apply go to https://nyprescriptionsaver.fhsc.com. This article also explains how people with or without Medicare who are under 65 can use this card.
This article was authored by the Evelyn Frank Legal Resources Program of New York Legal Assistance Group.