Medicaid spend-down eliminated through Ohio’s new disability determination system
Thursday, August 18, 2016
This summer, Ohio switched from a 209(b) state to a 1634 state. What does this mean? It means Ohio changed its disability determination system so that people who qualify for Supplemental Security Income (SSI) will also automatically qualify for Medicaid. As part of this change, Ohio has also decided to eliminate Medicaid spend-down and require beneficiaries to instead place excess income in a trust.
The Ohio Department of Medicaid refers to this as Ohio’s Disability Determination Redesign (DDR) and estimates that more than 400,000 Ohioans will be impacted. Ohio has created a website, benefits.ohio.gov/ddr.html, to help people understand if and how they are impacted.
Here are a few of the differences between 209(b) states and 1634 states:
As a 1634 state, Ohio has the option of eliminating its spend down program and it has decided to do so. This is one of the biggest changes – and challenges – facing Medicaid recipients. This program allowed individuals to “spend down” a portion of their income to qualify for Medicaid.
As part of Ohio’s Disability Determination Redesign, most people who would have been eligible for Medicaid via the spend down were automatically enrolled in Medicaid when the state switched from a 209(b) state to a 1634 state on August 1.
However, for some people, the automatic enrollment is only a “grace” period. With the elimination of the spend down, Medicaid recipients who are over the income limit will no longer have a path to eligibility and will have to seek coverage elsewhere. Their current Medicaid coverage will remain intact until their 2017 eligibility renewal date. Ohio’s Office of Health Transformation has estimated how many people may be impacted by this change and where they might seek alternative health coverage.
There are exceptions, however, including 1) for people with severe persistent mental illness (SPMI), and 2) for those who receive Medicaid long-term care services. This second group includes people who live in a nursing facility or intermediate care facility; individuals with intellectual disabilities (ICF-IDD); and people who receive home and community based services (HCBS) via waiver programs PASSPORT, Assisted Living, Ohio Home Care, Individual Options and MyCare Ohio.
Changes for people who receive Medicaid long-term care services
For people who receive long-term care services, income eligibility criteria will not change as a result of Ohio’s redesign. The currently monthly income limit for people who need Medicaid long-term care services and supports is $2,199 per month.
In the past, some Medicaid long-term care recipients have been over the monthly income limit but still qualified for Medicaid because of the spend down or patient liability. However, with the elimination of the spend down option, these individuals will need to create a Qualified Income Trust (QIT) in order to remain eligible for Medicaid.
A QIT, or “Miller Trust,” is a legal structure that allows income in excess of the eligibility limit for Medicaid long-term care to be disregarded, thereby making an individual eligible for Medicaid. An individual must place any monthly income over $2,199 into the trust. Funds deposited into the trust can be used to pay patient liability, incurred medical expenses, monthly personal allowance, and monthly bank fees associated with the trust.
A QIT is irrevocable, meaning it can only be cancelled when the individual dies. Because the state is named as the trust’s primary beneficiary, any funds remaining in the trust upon the individual’s death are used for estate recovery purposes. Click here for more information about QITs.
This change impacts more than 8,000 current Medicaid beneficiaries, many of whom reside in long-term care facilities. To help people navigate and better understand this change, Ohio has contracted with Automated Health Systems (AHS). AHS can answer questions and help people establish the trust, free of charge. Ohio has also developed several education tools, including a fact sheet and video to explain the changes.
Tools to help people understand QIT
Changes for people with severe persistent mental illness (SPMI)
To help fill gaps in mental health care provided through Medicare and private insurance, Ohio created a new Medicaid program for adults with SPMI who have income above the Medicaid eligibility guidelines. Ohio’s new program, called Specialized Recovery Services (SRS), will provide full Medicaid care plus recovery management care coordination services, assistance to find and keep a job, and support from others with similar life experiences.
Ohio created the new program through section 1915(i) of the Social Security Act. The program was reviewed and approved by the Centers for Medicare and Medicaid Services. To be eligible, individuals must have monthly income below $2,199, meet diagnosis criteria, and not live in a nursing facility, hospital or similar setting.
Council on Aging and two other providers will perform eligibility evaluations for the non-financial requirements of the SRS program and provide the recovery management services that support individuals receiving services. Read more about Council on Aging’s role in this program here.
Ohio estimates that more than 5,000 individuals with SPMI will qualify for this new program. Ohio Medicaid and the Department of Mental Health and Addiction Services will contact individuals who might be eligible for SRS and assist them with enrollment.
For more information about SRS:
Click here to read Ohio’s full Disability Determination Redesign plan, including information about the number of Ohioans impacted, and specific pathways to healthcare for people who receive long-term care services, have SMPI, or who might lose their Medicaid coverage as a result of the redesign.
Sources for this article:
Ohio Department of Medicaid and Ohio Office of Health Transformation
Ohio Benefits Website