Texas Health and Human Services Commission
Medicaid for the Elderly
and People with Disabilities Handbook
Effective: March 1, 2012
Co-Payment Budget Types
H-4100 Individual and Couple Cases
If a person or couple is already eligible for Medicaid and enters an institutional setting or after a person or couple in an institutional setting is determined eligible for MEPD, the person's or couple's co-payment is determined.
Ideally, the total countable income for the co-payment budget would be the same as the total countable income for the eligibility budget. Payments not considered as income in the eligibility and co-payment budgets are addressed in Section E-1700, Things That Are Not Income, and Section E-2000, Exempt Income. However, the co-payment budget may be different from the total countable income for the eligibility budget. When dealing with wages, normally earnings, including deductions, are considered in the eligibility. Mandatory payroll deductions are not considered when determining the co-payment budget. When determining the co-payment, consider the following:
- Section E-1760, Wage-Related Payments
- Section E-1770, Mandatory Payroll Deductions
- Section E-3110, Wages
HHSC nets the person's and spouse's earned income each month by subtracting the following mandatory payroll deductions:
- income tax,
- Social Security tax,
- required retirement withholdings, and
- required uniform expenses.
Due to automation limitations and requirements, special treatment for the co-payment occurs when the person:
- receives certain VA benefits; or
- does not have vendor payment coverage due to a transfer penalty or a substantial home equity disqualification.
Persons whose Department of Veterans Affairs (VA) benefits are capped at $90 per month retain the full $90 as a personal needs allowance.
The law (38 USC 5503) provides that the amount of the VA pension for an institutionalized Medicaid recipient having neither a spouse nor child (or in the case of a surviving spouse, having no child) cannot exceed $90 per month. The $90 VA pension may not be used in determining what a person in an institutional setting must pay to the facility toward the cost of care. The limited VA pension, up to the amount of $90, is not counted as income in the eligibility or co-payment budget. There is no interaction between the reduced pension and the personal needs allowance (PNA). If the veteran has income from other sources, the income from other sources may be considered countable for the purposes of co-payment. HHSC is to perform the co-payment calculations to determine the amount of the veteran’s liability toward the cost of care.
Because of automation limitations, the VA $90 capped pension will be included in the PNA calculation.
- For a non-SSI Medicaid recipient in an institutional living arrangement who does not have a VA pension capped at $90 per month, the total PNA will be up to the current maximum of $60.
- For a non-SSI Medicaid recipient in an institutional setting who has a VA pension capped at $90 per month, the total PNA may be up to $150 ($90 VA plus up to $60 PNA).
- State supplementation will not be allowed for a Medicaid recipient who is not an SSI recipient.
- The VA $90-capped pension and PNA calculation does not impact the Protected Earned Income Allowance.
In a situation in which the veteran does not have another source of income from which to deduct the $60 PNA, the PNA will continue to be $90 and the co-payment will be zero. In a situation in which the veteran’s other source of income is less than $60, the PNA will be $90 plus the amount of other income, not to exceed $60. There is no state supplement to bring the PNA up to $60 if the veteran does not have other income from which to subtract the PNA. The PNA deduction comes first in the order of all co-payment deductions, including those for incurred medical expenses (IME).
Note: See Section E-4300, VA Benefits, on treatment of payments from the Department of Veterans Affairs. See Section E-4311.2, $90 VA Pension and Institutional Setting, regarding automation limitations and the VA $90 capped pension.
In a situation in which the person is eligible for Medicaid, but has a transfer of assets penalty or a substantial home equity disqualification, follow Appendix XXIII, Procedure for Designated Vendor Number to Withhold Vendor Payment. For policy information on transfer penalty and substantial home equity disqualification, see the following:
- Chapter I, Transfer of Assets, and
- Section F-3600, Substantial Home Equity
- Section F-3610, Persons Impacted by Substantial Home Equity Disqualification
- Section F-3620, Persons Not Impacted by Substantial Home Equity Disqualification
- Section F-3630, When the Equity Value is Greater Than the Limit
- Section F-3640, Reverse Mortgage or Home Equity Loan
- Section F-3650, Documentation
- Section F-3660, Undue Hardship
To determine co-payment for a person or couple, use the following budget steps.
Step 1. Determine the person's monthly net earned and gross unearned income.
- When income tax is withheld from retirement, pension and disability benefits, use the net income amount in the co-payment calculation. Use the gross amount for the eligibility calculation.
- VA aid and attendance benefits, housebound allowances, and reimbursements for unusual or continuing medical expenses are exempt from both eligibility and co-payment. However, if these payments are deposited into a qualifying income trust (QIT) account, they are countable for co-payment.
Step 2. Add net earned and gross unearned income.
Subtract the personal needs allowance of $60 from available income for an individual budget. Subtract guardian fee allowance, if applicable. Subtract incurred medical expenses. Subtract home maintenance allowance, if applicable. The remainder is the co-payment.
Subtract the personal needs allowance of $120 from the combined available income for a couple budget. Subtract guardian fee allowance, if applicable. Subtract incurred medical expenses. Subtract home maintenance allowance, if applicable. Divide the remainder by two to determine the co-payment for each spouse.
H-4200 Companion Cases
For Companion Cases, see Chapter J, Spousal Impoverishment.