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How to overcome the challenge of obtaining Medicaid eligibility

In the Aesop fable “The Crow and the Pitcher”, a crow drops stones one by one into the neck of a tall, narrow pitcher. Before it dropped the stones, the water in the pitcher was too far down for the thirsty crow to reach. Each stone raised the water level a bit until there were enough stones to displace the water, so that the intelligent bird could reach it. Scientists have since studied birds like crows and parrots and determined that these animals do, in fact, have the intelligence to find solutions to puzzles. This video even shows crows teaching themselves to combine distinct parts to make a tool that can get to the food reward. When their first attempt did not work, they looked for a unique new way to reach their goal. My clients and I take a similar approach to obtaining and maintaining government disability benefits. Medicaid is a benefit that provides crucial funding for adult disability services. It is also a benefit that has multiple categories for eligibility, and it may be necessary to consider more than one before finding the route to success.

There is Medicaid through the “Aid to the Aged, Blind and Disabled” (“AABD”) eligibility category. This Medicaid category is generally linked to the eligibility for Supplemental Security Income (SSI) through the Social Security Administration. In 33 states, often called 1634 states, Medicaid eligibility is awarded automatically with SSI eligibility. These states (and district) are Alabama, Arizona, Arkansas, California, Colorado, Delaware, District of Columbia, Florida, Georgia, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming. In 7 states, a person with a disability has to apply separately for Medicaid, but the AABD Medicaid eligibility criteria are identical to those for SSI. These states are Alaska, Idaho, Kansas, Nebraska, Nevada, Oregon, and Utah. The remaining states, have both a separate application process and more restrictive financial criteria for AABD Medicaid. For example, in my home state of Illinois in order to qualify for AABD Medicaid, an applicant’s income may not exceed the Federal Poverty Level. This is a lower income threshold than that of SSI.

There is Affordable Care Act Adult Medicaid. In the 39 states that expanded Medicaid under the Affordable Care Act (ACA), people with disabilities can qualify for Medicaid as low-income adults. The Modified Gross Income (MAGI) limit for a single applicant is 138% of the Federal Poverty Level (actually, 133% with a 5% income disregard) with additional levels for applicants with two or more people in the family. Depending on whether the income is earned or unearned and depending on the state, in which the applicant lives, the ACA Medicaid income threshold may be higher than the AABD income threshold. This is true in Illinois. Moreover, ACA Medicaid does not have an asset (what the SSA calls a “countable resource”) limit. However, it is important to understand that because the ACA is integrated with the tax code, the aggregate income of everyone in one’s “tax household” must fall within the ACA guidelines. This may be problematic when an adult with a disability is claimed as a disabled child on her/his parent’s tax return and is, therefore, in the same tax household as her/his parents. The states that did not expand Medicaid are Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, and Wyoming.

There is Medically Needy Medicaid. People with disabilities, whose income is too high for them to qualify for Medicaid but who also have high medical and/or personal support expenses, may be able to qualify for Medicaid in the “Medically Needy” category, if they live in one of these states. In these states, a person can “spend down” his or her excess income on medical care or personal support. Once the income has been reduced below the relevant Medicaid threshold for a particular month, the person will qualify for Medicaid, which can then cover additional medical and support costs. Some states augment this program with a “pay-in/spend-down” version. In those cases, in any month where the person does not have enough expenses to meet her/his required spend down, s/he can pay the difference to the state Medicaid agency. To make a shorter list, the states (and district) that do not have a medically needy category are Alabama, Alaska, Arizona, Colorado, the District of Columbia, Idaho, Indiana, Missouri, Mississippi, Nevada, New Mexico, Oklahoma, Oregon, South Carolina, South Dakota, and Wyoming.

There are also Miller (or Qualifying Income) Trusts. In states that do not have a medically needy pathway to Medicaid eligibility, a person with a disability can deposit income into a Miller or Qualified Income trust. Income so deposited does not count towards the state’s Medicaid income limit. The entire amount of income from a source must be deposited. For example, if a person receives Social Security Disability Insurance and also works, and elects to deposit her/his Social Security into the trust, the entire monthly SSDI check must be deposited, even if a lesser amount would bring the beneficiary below the relevant Medicaid income threshold. Funds in a Miller trust may only be used to cover the beneficiary’s share of long-term care costs (otherwise covered by Medicaid expenses not covered by Medicaid) and a personal needs allowance that varies by state and may also vary according to whether the beneficiary lives in a Medicaid-funded facility or in her/his own home in the community.

Then, there is Medicaid eligibility as a member of a special group of former SSI recipients. As noted in one of my previous blogs, a person who is concurrently eligible for SSI and Medicaid and who then becomes ineligible to receive an SSI payment for certain reasons remains eligible for Medicaid. The applicable reasons are: an increase of earned income that reduces SSI payable to $0 (section 1619 of the Social Security regulations), the start of a so-called “Childhood Disability” or “Disabled Adult Child” (CDB/DAC) benefit that is payable on a parent’s work record that then reduces SSI payable to $0 (section 1634 of the Social Security regulations), and a cost of living adjustment (COLA) to a SSDI or CDB/DAC benefit that reduces SSI payable to $0 (the Pickle Amendment).

Finally, there is Medicaid for Workers with Disabilities. All but six states and the District of Columbia have so-called Medicaid Buy-in programs for workers with disabilities. The six states are Alabama, Hawaii, Missouri, Oklahoma, South Carolina, Tennessee, and Virginia. This eligibility category permits income, varying by state, of up to $5,080/month ($60,960/year), although some states are much lower. Most states require a premium after a certain amount of income, which, again, varies from state to state. Finally, many states allow a larger number of “countable” resources (assets) for people on the Medicaid Buy-in program, compared to people on the AABD program. For the details on your state, check here. It is important to note that most people only qualify for Medicaid Buy-in, while they are working. Some states allow a grace period after the beneficiary stops work. In general, working people who access Medicaid via a Buy-in program and who expect to continue to need Medicaid even after they stop working should plan ahead to switch to another Medicaid eligibility category at that time.

An intelligent crow can puzzle out challenges to meeting its needs, as shown in the famous fable. Working with government agencies to figure out how their rules can best be met to support my clients does, sometimes, feels like an unsolvable puzzle. Often, though, there is a way when we persist. We do not get the instant gratification of a tasty treat or a drink of water. The reward often takes months to come, but when it does, it is substantial. A potential lifetime of medical benefits and supports for our family member with a disability is a challenge to obtain but very rewarding, once reached.

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