Major Change in Ohio’s Medicaid Laws
The 1634 Transition
“The world hates change, yet it is the only thing that has brought progress.”
A change to Ohio’s system of qualifying for need based public benefits is long overdue. The current system is fragmented and complex requiring needy individuals who are aged, blind or disabled to navigate a maze of different agencies, policies and procedures to qualify for SSI, Medicaid, and other programs.
|OOD – Opportunity for Ohioans with Disabilities||ODM – Ohio Department of Medicaid|
|Resources – $2,000||Resources – $1,500|
|Income – $743||Income – $634|
On July 1, 2016 Ohio will streamline its Medicaid system by using the same eligibility requirements for Medicaid as are used by the Social Security Administration to determine eligibility for SSI. Only one application will be necessary and those qualified for SSI will automatically qualify for Medicaid.
ELIMINATION OF SPENDDOWN
Under the present Medicaid system, individuals with income higher than the qualifying level can “spenddown” their excess income on medical expenses each month in order to qualify. Spenddown can be made in a variety of ways and expenses are sometimes grouped together making individuals qualified in some months, but not in others.
|Reoccurring Expenses||“Pay In”||Delayed|
|Established monthly costs or unpaid medical bills that meet spend down||Pay excess assets directly to Medicaid by the 15th of the month||Expenses are “incurred” in the month whether or not the person pays the bill|
The “spenddown” system is inordinately complex both for the applicant and for the Medicaid worker who must review the bills and payments used to determine eligibility month by month. Depending on the type of spend down, the system is also patently unfair as some people may be forced to pay up front while others may “incur” bills that are never paid.
THE 1643 TRANSITION
Effective July 1 there will be no spenddown option. Those with income more than the qualifying level will no longer be eligible for Medicaid benefits. ($733/month for community Medicaid –$2,199/month for institutional Medicaid)
The majority of Ohioans receiving Medicaid will not be affected by the change. Some who are will leave Medicaid and seek medical coverage through the exchange or through Medicare. Individuals with severe and persistent mental illness will be covered under a new state plan with an income cap of 300% of the Federal Benefit Rate ($2,199 in 2016).
“What we call progress is the exchange of one nuisance for another nuisance.”
QUALIFIED INCOME TRUSTS (Miller Trusts)
In place of monthly spenddown, individuals with too high an income to qualify for Medicaid must place their excess income in a Qualified Income Trust (QIT) each month. Income properly placed in the QIT is disregarded and the individual will qualify for Medicaid.
Ohio has issued regulations regarding the qualification and operation of QIT’s and has engaged the services of Automated Health System to educate applicants and facilitate the establishment of QIT’s. These services will be provided free of charge for those already on Medicaid who will lose their benefits because of excess income when the transition occurs on July 1 (an estimated 30,000 people).
A QIT can only be used to establish Medicaid eligibility by a primary beneficiary who is eligible for LTC Services by the Ohio Medicaid Program.
- Inpatient care in an institution such as a nursing home
- Home and Community Based Services
- Program for All-Inclusive Care for the Elderly (PACE) Services
WRITING THE QIT
The Trust itself must meet all the statutory requirements:
- Established by primary beneficiary, his agent or guardian
- Primary beneficiary cannot serve as trustee
- Medicaid payback on the death of the primary beneficiary
FUNDING THE QIT
Trustee must establish a QIT account with a bank, credit union or other financial institution.
- Only the primary beneficiary’s income can be placed in the QIT account
- No other property or resources can be put into the QIT account (income received in one month and held into the next month is then considered a resource)
- The primary beneficiary cannot assign his income directly to the QIT account, but must first receive the income then move it to the QIT in the same month
- The primary beneficiary can put some of all of his income into the QIT, but all of the income from any one source must be put into the QIT account
- The source of the income must be reported to Medicaid
DISTRIBUTING FROM THE QIT
- Each month after the excess income is deposited into the trust account, distributions must be made as follows:
- Personal allowances for the beneficiary
- Maintenance allowance for the beneficiary’s spouse or dependents
- Medical expenses incurred by the beneficiary
- Up to $15 for bank fees, attorney fees, or other administrative costs
|Income||Social Security – $2,050
Pension – $1,000
|Income||Social Security – $2,050
Pension – $1,000
- If the QIT is not established, the beneficiary cannot qualify for Medicaid
- If the QIT document is not drafted correctly, everything in the QIT account will be considered available resources
- If the verifying information is not provided to Medicaid every month, the income will be considered available and the beneficiary will be ineligible for Medicaid – any payments made by Medicaid during a period of ineligibility are subject to recovery
- Any funds other than the permitted income put into the QIT account will be considered an improper transfer
- Any distributions made from the QIT account other than those permitted will be considered an improper transfer
Some questions remain regarding the QIT process. Who will establish the QIT’s for disabled individuals who do not have an agent or guardian? Who will arrange for the transfer of their income to the QIT each month? Who will serve as Trustee for those who have no one?
“Any change, even a change for the better, is always accompanied by drawbacks and discomforts.