Health Insurance: When determining a participant’s surplus, health insurance premiums are deducted before other medical expenses are allowed.
Health insurance premiums for the institutionalized participant paid by the participant or his/her community spouse may be allowed as medical deductions.
Allowable medical deductions for health insurance include:
- Supplemental Medical Insurance (SMI) premiums if the participant pays for Medicare A or Part B and is not eligible for Buy-In, QMB, or SLMB
- Health Insurance premiums
- Medicare Supplement policy premiums
- Medicare Part C premiums and Part D premiums
- Cancer Insurance premiums
- Nursing Care Insurance premiums
- Dental and Vision policy premiums
Other Medical Expenses/Post Eligibility Medical Expenses (PEME): The Post Eligibility Medical Expense deduction allows for a participant’s surplus to be reduced to enable him/her to pay for necessary medical expenses that were incurred during the three months prior to the month of their application.
NOTE: Pursue prior quarter coverage prior to exploring a reduction of the surplus amount.
The legal reference for allowing Post Eligibility Medical Expenses to reduce the surplus is 42 CFR § 435.733.
Post Eligibility Medical Expenses are subject to the following restrictions:
- An expense incurred as the result of a transfer of property penalty cannot be used to reduce the surplus.
- The expense must be owed by the institutionalized participant, not the participant’s spouse or any other third party.
- The expense must have been incurred no earlier than three months prior to the month of the participant’s most recent application. Expenses incurred prior to that period are not allowable deductions.
EXAMPLE: Mr. Cole lives in a nursing home and applies for vendor coverage in May 2019. He submits two outstanding medical bills: one is a $500 bill from February 2019, the other is an unpaid hospital bill from October 2018. Mr. Cole’s surplus can be reduced to cover the expense from February 2019. The October 2018 expense occurred before the prior quarter began, so cannot be used to reduce the surplus.
- The participant must be responsible for the expense. An expense that was covered by Medicare, any other insurance, or a third party for the period in which it was incurred cannot be used to reduce the surplus. To determine the participant’s responsibility for an expense, apply the policy from MHABD manual section 0810.010.15.02 Determining Patient Responsibility After Third Party Liability.
EXAMPLE: Ms. Young applied for coverage in July 2018. She submits a $700 pharmacy bill for a Medicare-covered prescription from June 2018 and she would like a reduced surplus. Only the co-pay (participant’s liability) for the expense can be used to reduce the surplus because Ms. Young had Medicare coverage for the prescription during the time period in which the expense was incurred.
- Allowable Post Eligibility Medical Expenses include any expenses countable for meeting a spend down. For information regarding expenses allowed to meet a spend down refer to MHABD manual section 0810.010.15.05 Allowable Medical Expenses for Spend down.
- Money owed to the Family Support Division (FSD) as part of a claim cannot be used to reduce the surplus.
- An expense can be used to reduce the surplus only once. If the surplus is reduced to allow for the expense, and the participant does not pay it, do not reduce the surplus for that expense a second time.
- An expense incurred because of a participant’s failure to pay any portion of their surplus cannot be used to reduce the surplus.
- The expense must be verified as medically necessary. If the expense is for a service that would otherwise be covered by Medicare or MO HealthNet, it is considered to be medically necessary. If it is not, a physician’s statement can be used to verify medical necessity.
- If the expense is for nursing home care, the surplus can be deducted by an amount no greater than the monthly rate listed on the MO HealthNet Division’s Nursing Facility Rate List.
Upon receipt of a request for a surplus deduction for medical expenses, the FSD staff member should request a copy of the receipt or bill to verify countable medical expenses. The receipt or bill must include:
- name of patient,
- date of service(s),
- type of service(s) provided,
- charge for service(s) provided,
- amount of third party liability, and
- amount that the participant is responsible to pay.
The surplus reduction for medical expenses is effective the month in which the expense is reported, and cannot be applied prior to the month the expense was incurred. Worker initiated budget calculations adjusting past surpluses should only be entered to account for agency error, or in situations where the eligibility system restricts the FSD staff member’s ability to properly change the surplus.
Note: The surplus may be reduced for as many months as necessary to account for all of the allowed Post Eligibility Medical Expenses. The PEME must be divided over the minimum possible months.
Example: Ms. Gray has a surplus of $100 per month. She has $1000 in Post Eligibility Medical Expenses that can be used to reduce her surplus. The $100 surplus will be reduced to zero for 10 months. The surplus cannot be reduced to $50 for 20 months.