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Clear As Mud: A brief update on basic Medicaid rules in the wake of obamacare legislation. By Christy L. Wesig
September 1, 2014
There has been a lot of confusion and questions arising from the ratification of the “Obamacare” legislation, especially as it pertains to Medicaid. And while this article isn’t meant to clear up all the confusion or to deal with all of the nuances and aspects of life after “Obamacare,” it will shed some light on some of the changes to Medicaid that have come about as a result of the new legislation.
Following the “Obamacare” legislation, there have emerged two different Medicaid plans. The first is the “Traditional Medicaid” and the second will be referred to for the purposes of this article as “Community Medicaid.” Although the services are similar, the qualifications are substantially different and may make one version substantially more appealing than the other, depending on an individual’s circumstances.
An applicant that is currently receiving Medicaid under the traditional Medicaid Plan may be considered under the Community Plan, but the applicant must reapply to receive such consideration. Each applicant will be assessed for qualification under each plan before being refused Medicaid. An applicant can only participate in one Medicaid plan, but will receive the similar coverage and benefits under either plan.
The Traditional Medicaid has higher income limits, but continues to have a spend-down requirement and an asset limitation of $1500. An applicant will not be eligible for Community Medicaid and can only be considered for Traditional Medicaid subject to the asset limitations, if any of the following conditions exist:
The applicant is receiving Medicare.
The applicant is 65 or over. An applicant who is eligible for Medicare, but has not applied will still be ineligible for Community Medicaid.
The applicant has an income that exceeds the Community Medicaid MAGI limits (explained below), but is under the Traditional Medicaid limits.
The applicant is requesting waiver services for in-home care.
The applicant is in a nursing home and is therefore subject to state recovery.
These common conditions will require an applicant to be considered only for the Traditional Medicaid plans. In addition, there may be other conditions that limit an applicant to consideration only under the Traditional Medicaid Plan.
The Traditional Plan has been modified, however, and there are new rules regarding the impoverished spouse and protecting some of the independent spouse’s assets and income in the circumstances where one spouse necessitates nursing-home level care.
The Community Medicaid has no asset limit and no spend-down requirement. The income requirement, called MAGI-Based Eligibility (Modified Adjusted Gross Income), is used to calculate an applicant’s household size and income to determine eligibility. Only income is relevant in the determination of financial eligibility for Medicaid under the Community Plan. MAGI eligibility is based on a percentage of the Federal Poverty Level (FPL) for each specific applicant category.
The following table is the maximum income permitted to qualify for the Community Medicaid for 2014:
Although these limits may be strict, there are certain types of income that are not included in the calculations. The MAGI is based on federal tax laws and income that are not included when filing taxes are most likely not counted for determining MAGI. For instance, child support is not considered income for either federal taxes or for MAGI, but spousal support is considered income for both federal taxes and determining Medicaid eligibility.
Some common sources of income that are included in the calculation are:
Social Security Retirement
Social Security Disability Insurance
Income taken from retirement or investment accounts
Income gifted from family or friends
Some common sources of income that are excluded from the calculation are:
SSI (Supplemental Social Security Insurance)
These lists are not exhaustive, but give the treatments of some of the most common types of income considered for Medicaid eligibility.
At this time, based on the best information available to us from the Ohio Attorney General’s Office, the assets of a deceased Community Plan Medicaid recipient are likely not subject to Medicaid Estate Recovery, even if the applicant is over 55. However, a Community Plan recipient who later requires long term or nursing home care will have to reapply for Traditional Medicaid, which is subject to spend down and the $1,500 asset limitation. Once a recipient qualifies for Traditional Medicaid, his or her estate will be subject to Medicaid Estate Recovery for expenses paid for nursing home or other long term care expenses.
The best way to apply for Medicaid benefits under either plan is online at Benefits.Ohio.Gov More information can be found online at websites such as: