NMP spend-down makes it possible to deduct medical expenses from net income to become eligible for NMP. When an applicant/recipient group's net income is more than the eligibility limit for continuing NMP, the CAO will apply the NMP spend-down rules.The CAO will make the following deductions, as needed, to try to make the applicant/recipient group income-eligible:
$10 from the total net income of the group.
Paid or unpaid medical expenses, if the expenses meet the rules in Chapter 360, NMP Deductions.
NOTE: Only medical expenses paid in the month for which monthly spend-down eligibility is being determined can be used. Expenses paid in past months are not allowable. Unpaid medical expenses from the retroactive period may be used, as long as the individual still has to pay them.
Example: On June 7, Mrs. Smith applies for TANF-related NMP for herself and her two children, ages 10 and 16. Each child gets $175 a month in court ordered support. Mrs. Smith is employed and earns $820 a month. Mrs. Smith qualifies for the incentive, because she had received TANF-related NMP in one of the four calendar months before the month she applied. The family has no paid or unpaid medical expenses.
MA eligibility for June.
|
Gross earned income |
$820 |
|
Work Expenses |
-$120 |
|
$700 |
|
|
50% Earned Income Incentive Deduction |
-$350 |
|
|
$350 |
|
Court-ordered support: $350-$200 (MA Support disregard) |
+150 |
|
|
$500 |
|
$10 spend-down |
-$10 |
|
|
$490 |
|
$421 |
Mrs. Smith and her children are ineligible for TANF-related NMP, unless they have $69 ($490 - $421) of paid medical expenses in June or unpaid medical expenses from the retroactive period that they still have to pay.
The CAO must subtract the deductions from the applicant/recipient group's total net income. The total net income is found by applying the rules in Section 368.3, Continuing NMP.
Spend-down eligibility exists when the applicant/recipient group's total monthly net income, after allowable spend-down deductions, is equal to or less than the NMP limit.
For the TANF/GA-related categories of PC, PU and PD, the limit is the family size allowance (FSA) listed in Chapter 368, Appendix A.
For the SSI-related categories of PA, PJ and PM, the limit is the SSI benefit level listed in Chapter 368, Appendix B.
There are two types of NMP spend-down:
Monthly review not required.
The monthly review of NMP spend-down eligibility is not required if:
The applicant/recipient group is found to be eligible after the $10 deduction is applied.
The applicant/recipient group's income and medical expenses (those not covered by the NMP program) are expected to stay the same for the next eleven calendar months or the rest of the calendar months that are left until the next renewal.
The CAO will approve continuing NMP on the basis of expected income and expenses. These monthly spend-down budgets are assigned a program status code of 22.
Example: Mr. George receives NMP spend-down, category PA. His only income is his monthly Social Security benefit. His spend-down eligibility is based on the $10 spend-down deduction and his monthly Medicare Part B premium. The CAO approves continuing NMP.
Monthly review required.
The CAO must determine eligibility for each month that spend-down is requested. These monthly spend-down budgets are assigned a program status code of 21.
Example: Mr. Sing is eligible for NMP spend-down. His eligibility is based, in part, on prescription expenses, which vary from month to month. Each month, Mr. Sing gives the CAO proof of his medical expenses. Each month, the CAO approves NMP beginning the day after the spend-down amount is met and ending the last day of the calendar month.
For an applicant/recipient group that is eligible for NMP spend-down, the CAO will begin NMP coverage in the calendar month in which eligibility is set. Coverage will begin on one of the following days, whichever is later:
The date of application.
Example: Mr. Able applies for NMP on July 12 and shows proof of medical expenses for July 6. The medical expenses are needed to set Mr. Able's eligibility for NMP spend-down. NMP begins on July 12, the date of application.
The day after the date a member has a medical expense that brings the countable net income within the income limit.
NOTE: The CAO will approve NMP spend-down effective the day after the medical expense was charged, not the date it is proven.
Example: Mr. Clark applies on July 12. His income is $30 more than the NMP limit. On July 13, he has a prescription expense, which lowers his income to below the limit. He provides proof of the expense on July 15. NMP begins July 14, the day after he provided proof of the paid prescription.
If the applicant/recipient group is found eligible for NMP spend-down, the CAO will continue eligibility as follows:
When a monthly review is required, NMP eligibility will end on the last day of the calendar month. The applicant/recipient group must be found eligible for each month after that before NMP coverage can be approved for the rest of that month.
Example: Mr. Baker gets PJ under NMP spend-down. Each month he must spend $120. His monthly Medicare Part B expense is $99.90. He spends the rest ($20.10) to pay for some of his prescriptions, which usually cost about $85 per month. On June 3, he proves that he had an expense of $24 for a prescription on June 2. The CAO approves a one-time issuance in category PJ, beginning June 3 (the day after he received the prescription) and ending June 30. Mr. Baker must spend $20.10 again in July before NMP can be approved for the rest of that month.
When a monthly review is not required, NMP eligibility is approved on a continuing basis. The CAO will review eligibility when there is a change or at renewal.
Example: On October 12, Ms. Schultz applies for MA to help with the cost of prescriptions and a monthly visit to her doctor. Her only income is a Social Security disability benefit. A Medicare Part B premium of $99.90 is deducted from her check each month. Ms. Shultz's income after allowable deductions is $35 more than the SSI benefit level. The CAO applies the spend-down rules by deducting $10 and the $99.90 Medicare Part B premium. Ms. Schultz is eligible for NMP. Since both her income and medical expenses are not expected to change, the CAO approves continuing NMP beginning October 12.
When a monthly review is required, the CAO will not require an application. If the applicant/recipient group fails to become eligible or is found ineligible for three months in a row, then the CAO will treat a request for NMP as a new application and will require a new application form.
The CAO will determine an applicant/recipient group’s eligibility for MNO for the month not covered by NMP spend-down. If the applicant/recipient group is eligible for MNO, the CAO will approve MNO. The CAO will close and open MNO for the periods of NMP eligibility. A new application is not required.
Example: On November 2, the CAO receives an application for MA. The CAO determines that the individual must spend $55 each month to be eligible for NMP spend-down. The individual is also eligible for MNO. The CAO lets the individual know about the need for spend-down and approves continuing MNO effective November 2. On November 15, the individual proves that he met the $55 spend-down amount on that date. The CAO closes MNO and approves NMP to cover November 16 through November 30. The CAO reopens continuing MNO effective December 1.
The CAO will determine NMP spend-down eligibility when the applicant/recipient group's net income is over the limit. (See Section 368.3, Continuing NMP.)
For NMP spend-down, the CAO will consider income and expenses as follows:
For the calendar month of application or the calendar month in which the applicant/recipient group becomes eligible, the CAO will count the actual proven income and expenses from the first day of the calendar month and add the expected income and expenses for the rest of the calendar month. If the income is received weekly or biweekly, the CAO will find the average weekly amount and multiply it by four to obtain the monthly amount.
NOTE: The CAO will not use the 30 days before application or eligibility to estimate income for spend-down.
For calendar months after the month of application:
If a monthly review is required, the CAO will count actual proven income and expenses from the first of the month to the date of eligibility and add the expected income and expenses through the last day of the month. If the income is received weekly or biweekly, the CAO will find the average weekly amount and multiply it by four to obtain the monthly amount.
If a monthly review is not required, the CAO will count the expected income and expenses for each calendar month.
The CAO will determine expected income and expenses on the basis of what the applicant/recipient group will receive or pay during a calendar month.
The CAO will determine spend-down eligibility as follows:
1. Deduct $10 from the group's total net income. Compare the amount that is left with the NMP limit.
For TANF/GA-related categories, the limit is the family size allowance (FSA) listed in Chapter 368, Appendix A.
For SSI-related categories, the limit is the SSI benefit level listed in Chapter 368, Appendix B.
If the net income is equal to or less than the limit, approve continuing NMP spend-down, using program status code 22.
If the net income is over the limit, determine whether a member of the group has any unpaid or paid medical expenses that can be used to spend down the net income. (See Chapter 360, NMP Deductions, for allowable medical expenses.)
2. Deduct allowable medical expenses from the net income, after the $10 deduction. Deduct paid expenses only if they are paid in the calendar month for which spend-down is being requested. Deduct unpaid expenses from the three-month retroactive period and expected expenses in the month for which spend-down is being requested. 55 Pa. Code § 181.13(e)
3. Compare the amount that is left with the income limit.
For TANF/GA-related categories, the limit is the family size allowance (FSA). listed in Appendix A.
For SSI-related categories, the limit is the SSI benefit level listed in Appendix B.
If the net income is equal to or less than the limit, approve NMP, as follows:
Continuing spend-down, using program status code 22, if proven medical expenses are expected to stay the same in each following month.
Monthly spend-down, using program status code 21, if medical expenses are not expected to stay the same in the following months.
If the net income is over the limit, do not approve NMP. determine the group’s eligibility for Healthy Beginnings or MNO.
NOTE: Since monthly spend-down (program status code 21) is opened and closed each month, a renewal date cannot be set.
4. Send a notice to applicant letting them know of the decision.
Example: Mr. and Mrs. Dixon, both age 66, apply for NMP and talk with a caseworker on February 6. Mr. Dixon gets a gross Social Security benefit of $850 per month. Mrs. Dixon gets a gross Social Security benefit of $450. Each has Medicare Part B, at a cost of $99.90 each per month. In March, they will be billed $300 for their quarterly Blue Cross/Blue Shield premium.
Net income eligibility for February.
Mr. .Dixon’s gross unearned income $900.00
Mrs. Dixon.’s gross unearned income +450.00
Total gross unearned income $1,350.00
Unearned income exclusion -20.00
Total net income $1,330.00
Healthy Horizons limit for two $1,261.00
SSI benefit level for two $1,081.30
The income is more than the limit for both Healthy Horizons and NMP (PA). The CAO considers NMP spend-down eligibility.
Spend-down eligibility for February
Total net income $1,330.00
$10 Spend-down deduction -10.00
$1,320.00
SSI benefit level for two $1,081.30
Excess income to be spent $238.70
Medical expenses (Medicare ) -199.80
Amount to be spent each month $38.90
Mr. and Mrs. Dixon do not expect any other medical expenses for the month of application (February). The CAO approves monthly spend-down beginning with a noncontinuous eligibility effective for the calendar month of March, when they will have to pay the Blue Cross/Blue Shield premium.
Updated February 14, 2012, Replacing October 25, 2008