2012 Memorandums

IM-#95      11/29/12



P.O. BOX 2320




The purpose of this memorandum is to remind staff of correct policy and procedure for treatment of Long Term Care (LTC) insurance payments for MO HealthNet programs. This memorandum addresses:

NOTE: Individuals who receive benefits from LTC policies that qualify as LTC partnership policies are allowed a disregard of assets in determining eligibility for MO HealthNet for the Aged, Blind, and Disabled (MHABD). Refer to Income Maintenance (IM) memorandum IM-64 dated August 21, 2008 Missouri Long Term Care Partnership Program And Disregard Of Assets In The Eligibility And Estate Recovery Process and IM Manual section 1030.055.20 Qualified Long Term Care Partnership Policy Requirements for information about Missouri's long-term care partnership and how to apply the asset disregard to available resources.

Individuals who have a Long Term Care (Nursing Care) Insurance Policy may receive daily payments for services such as home health aides, adult day care, assisted living facilities, and nursing home care.  This income is paid to the institutionalized individual, community spouse, or other beneficiary, such as the nursing facility and should be considered as unearned income when determining the vendor surplus. See MHABD Manual section 0805.015.30 NON-EARNED INCOME. The eligibility specialist must manually calculate the monthly amount (Daily rate x 365 days = yearly benefit divide by 12 months) and enter as unearned income (UI) type, Nursing Home Insurance (NI) source, on the Select Income (SELINC/FMX2) screen in FAMIS.

If the insurance company pays the nursing facility, the facility must take the payment into consideration the same as the facility would with other sources of countable income paid to them on behalf of the participant, such as Social Security benefits which are paid directly to a nursing facility. Because LTC insurance payments are budgeted as unearned income to the participant, when a nursing facility receives payment directly from a LTC insurance policy the nursing facility must count it as a payment toward the participant's surplus.

If the LTC insurance company discontinues payments, the eligibility specialist must adjust the surplus by completing a SELWIBCA or a regular budget adjustment following changes in circumstances policy. See IM Manual Section 0840.010.00 CHANGES IN CIRCUMSTANCES.

NOTE:  A decrease in the surplus amount must be effective no later than the first day of the month following the month in which the change caused the surplus amount to decrease.

EXAMPLE: A participant has a long term care insurance policy which covers nursing facility care. According to the terms of the policy, the company will pay $15 per day for patient care while in the nursing facility. This payment will not be reduced if the participant's income increases or if the nursing home is also paid from another source. Therefore, in addition to any other income, the participant has $456.25 ($15 X 365 days divided by 12 months) which must be counted as unearned income in determining the vendor surplus. If the participant has not yet begun receiving the payment, set a reminder to adjust the surplus amount when the payment is expected to begin.


Enter LTC (nursing home) insurance income as income type UI – Unearned Income and source code NI – Nursing Home Insurance on the Income (FMX0) screen in FAMIS.

The Medical Expense (MEDEXP/FMXA) screen captures information on medical expenses. If the participant is paying a premium for the Long Term Care policy it will be entered on this screen.

The Medical Expense screen does not capture information on health insurance coverage. Health insurance information is entered on the Select Insurance (SELINS/FM8L) screen. From the Select Insurance (SELINS/FM8L) screen, press F14=ADDINS to complete the Health Insurance Detail (FMXY) screen to provide information on the LTC policy. It is important to complete this screen to ensure that any claims will first be billed to the long term care insurance.



2012 Memorandums