Editor’s Note: This is the first of a three-part series explaining the ins and outs of the various laws and policies put in place by the 2001 legislature as they came out of the 2001 session. This month’s Part 1 has to do with the income, asset, and eligibility standards for programs serving people with disabilities. Future installments will focus on laws having to do with community supports to allow people get out and stay out of institutions and live independently in the community. The final installment will elaborate on all of the “other” provisions that don’t fit into the first two categories.
The 2001 Legislative Session and Special Session were marked by a huge budget surplus which declined a bit over the course of the Session due to economic conditions.
One of the most noteworthy developments during the legislative session involved a decision in late March by the Department of Human Services (DHS) to follow a 1999 law regarding the waiting list for home and community waiver services for persons with developmental disabilities. [See the April 10th ACCESS PRESS for details.] The DHS decision, made after several legislative hearings on unspent waiver funds, will result in thousands of persons from the waiting list being able to obtain services. The DHS decision should result in spending a good portion of the $66 million for the next biennium which had been designated as surplus prior to the Administration’s decision to encourage counties to use the resources as required by 1999 legislation.
What follows is a listing of the various specific provisions of the Omnibus Spending Bill For Health And Human Services, Chapter 9, First Special Session 2001, focusing on those provisions that have to do changes in some of the income, asset, and eligibility standards related to programs serving people with disabilities.
MA Income Standard
The Medical Assistance Income Standard for Persons Who are Elderly or Disabled, Article 2, Sections 16, 17, 21 and 24:
1. For persons whose Social Security or other income is at or below $716 per month (100% of the Federal Poverty Guidelines (FPG)), the Legislature provided an increase from the current income standard of $482 per month to $716, 100% FPG.
2. For persons with Social Security or other income over 100% FPG (i.e. $717 per month or higher), the Legislature changed the standard only to 70% FPG on July 1, 2001 and 75% FPG on July 1, 2002. Unfortunately, persons who are elderly or disabled with unearned income (those with earnings can use their Medical Assistance for Employed Persons with Disabilities, or MA-EPD, eligibility) over 100% FPG will have to continue to pay a spend down to $502 per month (70% FPG) beginning July 1, 2001, 75% FPG beginning July 1, 2002.
3. The cost of the increase in the income standard was offset by savings in Minnesota’s state-funded Prescription Drug Program (PDP). Medical Assistance is funded with 51% federal funds and 49% state funds, whereas the PDP program is funded entirely by state dollars. As the MA Income Standard rises, more persons will choose MA rather than PDP.
These changes will mean that 9,000 persons who are eligible for Medical Assistance due to age or disability will be relieved of a spend down obligation on July 1, 2001. A spend down is much like a deductible payment in which medical costs must be incurred to a certain dollar amount before health coverage (MA in this case) will pay additional medical costs. The medically needy group (those with unearned income over $716 per month) of 4,000 persons on Medical Assistance and 1,400 persons on General Assistance Medical Care will gradually be allowed to keep more of their income to live on rather than having to spend it on medical costs down to $482 per month.
The Medical Assistance for Employed Persons with Disabilities (MA-EPD) Premium Increase, Article 2, Section 28.
A premium increase for persons with disabilities who need Medical Assistance and have earnings will likely affect nearly everyone using the MA-EPD eligibility option. The premium schedule interacts with the MA income standard increase in that persons with earned and unearned income below 100% FPG ($716/month) will no longer be required to spend down to be eligible for
Medical Assistance. Therefore, unless these persons have assets over $3,000 or a spouse, they will not need the MA-EPD option.
Individuals with earned and unearned incomes over 100% FPG, will be required to pay a premium on a sliding scale basis beginning at 1% of total income at 100% of FPG and rising to 7.5% of total income for those at or above 300% FPG. This mean that approximately 5,000 persons using the MA-EPD eligibility option will be required to pay a premium beginning November 1, 2001. DHS is required to provide MA-EPD participants with a general notice that a premium change will become effective November 1, 2001. Several disability groups as well as DHS are working to provide the sliding fee scale premium information on their web sites by the fall.
The premium for persons at 100% FPG will be $7 per month. Those with 300% FPG in earned and unearned income ($2,148 per month) will be required to pay $161 per month beginning September 1, 2001. For those with earnings above $2,148 per month, 7.5% of total gross income
will be required as a premium.
MA-EPD Asset Protection During Illness
Medical Assistance for Employed Persons with Disabilities (MA-EPD), Asset and Income Protection During Illness or Job Loss, Article 2, Sections 19 and 28, amends Minn. Stat. § 256B.056, Subd. 3.
After at least one month of MA-EPD enrollment, a person who is temporarily unable to work due to a medical condition verified by a physician, may retain eligibility for up to four calendar months. This provision means that an individual with disabilities eligible for MA-EPD will not have to spend down to the excess income standard if their income is above 100% of the Federal Poverty Guidelines (FPG) for up to four months while recovering from an illness or injury. The individual will also be able to retain their assets up to the standards of MA-EPD (up to $20,000, etc.) rather than the regular Medical Assistance asset limits ($3,000 for an individual). This provision is effective July 1, 2001.
Another provision allows MA-EPD participants who lose their jobs to retain assets accumulated while eligible for MA-EPD for up to 12 months. The asset retention provision is available for any reason, including layoff, job change or extended illness, while the income provision above is only available if lack of earnings is due to a medical condition. THIS PROVISION ONLY BECOMES EFFECTIVE UPON FEDERAL APPROVAL, SO THE EFFECTIVE DATE IS UNCERTAIN.
Expansion of Prescription Drug Program Expansion of the Prescription Drug Program (PDP) for Persons with Disabilities and the Elderly, Article 2, Section 7 and 8.
The state-funded Prescription Drug Program (PDP) eligibility level for persons with disabilities was changed from 100% of the Federal Poverty Guidelines (FPG) to 120% FPG beginning July 1, 2002. This means that persons on Medicare with income up to 120% FPG ($859/month) will be eligible for prescription drug coverage by paying a monthly premium of $35.
Unfortunately, the Legislature failed to treat persons on Medicare under 65 similarly to persons over 65. Persons over 65 are eligible for the PDP up to 135% FPG beginning January 1, 2002.
Child Support Disregard Child Support Disregard for Children with Disabilities Eligible for MA Under the TEFRA Option, Article 2, Section 16.
Children who have child support payments or Social Security Survivor or Disability benefits paid by parents or through the parents’ Social Security eligibility will no longer have those funds subject to a spend down in order to be eligible for Medical Assistance under the TEFRA and Home and Community Waiver Options. This change affects a small number of families. Two-parent families whose children are eligible through the TEFRA or Home and Community Waiver Options must pay a parental fee, but are not subject to a spend down.
Because child support has been treated as income to the child, children had to spend down the child support or Social Security benefits in order to obtain Medical Assistance services through the TEFRA or Home and Community Waiver Options.
This very unfair provision has been changed and these children and their parents will now be able to use child support or Social Security benefits to pay basic living expenses rather than a spend down for health care coverage. This provision is effective upon federal approval which should be readily forthcoming given recent clarifications in federal rules and policy.
Next Month: Changes in the laws concerning community supports for people with disabilities.