CABINET FOR HEALTH AND FAMILY SERVICES

Department for Medicaid Services

Division of Policy and Operations

(As Amended at ARRS, February 10, 2014)

 

††††† 907 KAR 20:020. Income standards for Medicaid other than Modified Adjusted Gross Income (MAGI) standards or for former foster care individuals.

 

††††† RELATES TO: KRS 205.520, 38 U.S.C. 5503, 42 U.S.C. 1382a, 1396jj(b), 1397aa, 9902(2)

††††† STATUTORY AUTHORITY: KRS 194A.010(1), 194A.030(2), 194A.050(1), 205.520(3), 42 C.F.R. 435, 42 U.S.C. 1396a, 1396b, 1396d, 1397aa

††††† NECESSITY, FUNCTION, AND CONFORMITY:[EO 2004-726, effective July 9, 2004, reorganized the Cabinet for Health Services and placed the Department for Medicaid Services and the Medicaid Program under the Cabinet for Health and Family Services.] The Cabinet for Health and Family Services, Department for Medicaid Services has responsibility to administer the Medicaid Program in accordance with 42 U.S.C. 1396 through 1396v. KRS 205.520(3) authorizes the cabinet, by administrative regulation, to comply with any requirement that may be imposed or opportunity presented by federal law for the provisions of medical assistance to Kentucky's indigent citizenry. This administrative regulation establishes the income standards by which Medicaid eligibility is determined, except for individuals for whom a modified adjusted gross income is the Medicaid eligibility income standard or former foster care individuals who aged out of foster care while receiving Medicaid coverage.

 

††††† Section 1.[Definitions. (1) "ABD" means an individual who is aged, blind, or disabled.

††††† (2) "AFDC" means the Aid to Families with Dependent Children Program as it existed on July 16, 1996.

††††† (3) "Child" means a person who:

††††† (a)1.a. Is under the age of eighteen (18); or

††††† b. Is under the age of nineteen (19) if the person is:

††††† (i) In high school or the same level of vocational or training school; and

††††† (ii) Expected to graduate before or during the month of his 19th birthday;

††††† 2. Is not self-supporting;

††††† 3. Is not a member of the Armed Forces of the United States; and

††††† 4. If previously emancipated by marriage, has returned to the home of his parents or to the home of another relative; or

††††† (b) Has not attained nineteen (19) years of age as specified in 42 U.S.C. 1396a(l)(1).

††††† (4) "Family alternatives diversion payment" means a lump sum payment made to a K-TAP applicant to meet short-term emergency needs.

††††† (5) "Incapacity" means a condition of mind or body making a parent physically or mentally unable to provide the necessities of life for a child.

††††† (6) "Income" means money received from statutory benefits (including Social Security, Veteran's Administration pension, black lung benefits, or railroad retirement benefits), pension plans, rental property, investments, or wages for labor or services.

††††† (7) "Lump sum income" means money received at one (1) time which is normally considered as income, including accumulated back payments from Social Security, unemployment insurance, or workman's compensation; back pay from employment; money received from an insurance settlement, gift, inheritance, or lottery winning; proceeds from a bankruptcy proceeding; or money withdrawn from an IRA, KEOGH plan, deferred compensation, tax deferred retirement plan, or other tax deferred asset.

††††† (8) "Medicaid works individual" means an individual who:

††††† (a) But for earning in excess of the income limit established under 42 U.S.C. 1396d(q)(2)(B), would be considered to be receiving supplemental security income;

††††† (b) Is a least sixteen (16), but less than sixty-five (65), years of age;

††††† (c) Is engaged in active employment verifiable with:

††††† 1. Paycheck stubs;

††††† 2. Tax returns;

††††† 3. 1099 forms; or

††††† 4. Proof of quarterly estimated tax;

††††† (d) Meets the income standards established in this administrative regulation; and

††††† (e) Meets the resource standards established in 907 KAR 1:645.

††††† (9) "Minor parent" means a parent under the age of twenty-one (21).

††††† (10) "Official poverty income guidelines" means the poverty income guidelines which are:

††††† (a) Updated annually in the Federal Register by the United States Department of Health and Human Services, under authority of 42 U.S.C. 9902(2); and

††††† (b) The latest poverty guidelines available as of March 1 of the particular state fiscal year.

††††† (11) "SSI" means Supplemental Security Income Program.

 

††††† Section 2.] Income Limitations. (1)(a) [For the medically needy as described in 907 KAR 1:011,] Income shall be determined by comparing adjusted income as required by Section 2[3] of this administrative regulation, of the applicant, applicant and spouse, or applicant, spouse, and minor dependent children with the following scale of income protected for basic maintenance:

Size of Family

Annual

Monthly

1

$2,600

$217

2

3,200

267

3

3,700

308

4

4,600

383

5

5,400

450

6

6,100

508

7

6,800

567

 

††††† (b) For each additional family member, $720 annually or sixty (60) dollars monthly shall be added to the scale.

††††† (2)[The following special factor][factors][shall apply][be applicable ] For a pregnant woman or child eligible pursuant to 42 U.S.C. 1396a(e)[:] [(a) A pregnant woman or a child under age one (1) shall have family income not exceeding 185 percent of the official poverty income guidelines;

††††† (b) A child age one (1) or over but under age six (6) shall have family income not exceeding 133 percent of the official poverty income guidelines;

††††† (c) A child born after September 30, 1983, who has attained six (6) years of age but has not attained nineteen (19) years of age shall have family income not exceeding 100 percent of the official poverty income guidelines;

††††† (d) A pregnant woman or child who would be eligible under provisions of 42 U.S.C. 1396a(l) or 1397jj(b) except for income in excess of the allowable standard shall not become eligible by spending down to the official poverty guidelines as described in Section 9 of this administrative regulation;

††††† (e)] a change of income that occurs after the determination of eligibility of a pregnant woman shall not affect the pregnant woman's eligibility through the remainder of the pregnancy including the postpartum period which ends at the end of the month containing the 60th day of a period beginning on the last day of her pregnancy[;

††††† (f) A targeted low-income child as specified in 907 KAR 1:011, Section 2(3)(h), shall have family income not exceeding 150 percent of the official poverty income guidelines].

††††† (3) The[following] special income limits and provisions established in this subsection shall apply[be applicable ] for a determination of eligibility of a qualified Medicare beneficiary, specified low-income Medicare beneficiary, qualified disabled and working individual, or Medicare qualified individual group 1 (QI-1).

††††† (a) A qualified Medicare beneficiary shall have income not exceeding 100 percent of the official poverty income guidelines.

††††† (b) A specified low-income Medicare beneficiary shall have income greater than 100 percent of the official poverty income guidelines but not to exceed 120 percent of the official poverty income guidelines.

††††† (c) A Medicare qualified individual group 1 (QI-1) shall have income greater than 120 percent of the official poverty income guidelines but less than or equal to 135 percent of the official poverty income guidelines.

††††† (d) A qualified disabled and working individual shall have income not exceeding 200 percent of the official poverty income guidelines.

††††† (4) Income shall be limited to the allowable amounts for the SSI program for:

††††† (a) A child who lost eligibility for SSI[supplemental security income] benefits due to the change in the definition of childhood disability as established in 42 U.S.C. 1396a(a)(10); or

††††† (b) A person with hemophilia who received a class action settlement as established in 42 C.F.R. Part 130[435.122].

††††† (5) Income shall be limited to the allowable amounts for the mandatory or optional state supplement[State Supplementation] program for an individual described[a pass through recipient as established] in 42 C.F.R. 435.135.

††††† (6) The following special income factors shall apply for a Medicaid Works individual:

††††† (a) Income for a Medicaid Works individualís spouse shall not exceed $45,000 per year;

††††† (b) A Medicaid Works individualís unearned income shall be less than the SSI standard plus twenty (20) dollars monthly; and

††††† (c) The combination of earned and unearned income for a Medicaid Works individual shall be less than 250 percent[%] of the official poverty income guidelines.

 

††††† Section 2.[3.] Income Disregards. In comparing income with the scale established in Section 1[2] of this administrative regulation, gross income shall be adjusted as established in this section.[follows:]

††††† (1) In a TANF[an AFDC] or family related Medicaid case:

††††† (a)[,] The standard work expense of an adult member or out-of-school child shall be deducted from gross earnings;

††††† (b)[.] For a person with either full-time or part-time employment, the standard work expense deduction shall be ninety (90) dollars per month; and

††††† (c)[.] Earnings of an individual attending school who is a child or parent under age nineteen (19) or a child under age eighteen (18) who is a high school graduate shall be disregarded.

††††† (2) For an ABD Medicaid case or a Medicaid Works individual, the applicable federal SSI disregards pursuant to 42 U.S.C. 1382a(b) shall apply.

††††† (3) For an individual in a Medicaid eligibility group subject to 42 U.S.C. 1396a(a)(10)(E)(i), (ii), or (iv) or 42 U.S.C. 1396d(p), if an annual Social Security cost-of-living adjustment, Railroad Retirement cost-of-living adjustment, or federal poverty level cost-of-living adjustment causes an individual to be ineligible for Medicaid benefits:

††††† (a) The individualís most recent Social Security cost-of-living adjustment, Railroad Retirement cost-of-living adjustment, or federal poverty level cost-of-living adjustment shall be disregarded; and

††††† (b) The disregard referenced in paragraph (a) of this subsection shall continue until the individual loses Medicaid eligibility for any other reason for three (3) consecutive months.

††††† (4)[In an AFDC or family related Medicaid case, a dependent child care work expense shall be allowed for a child who is living in the home of the caretaker and is related to the caretaker in accordance with 907 KAR 1:011, Section 5(9)(b), for full-time or part-time employment.

††††† (a) The dependent child care work expense shall be deducted after all other disregards have been applied.

††††† (b) The dependent child care work expense allowed shall not exceed, per month:

††††† 1. $200 for full-time or part-time employment per child under age two (2); and

††††† 2. $175 for full-time employment or $150 for part-time employment per:

††††† a. Child age two (2) or above; or

††††† b. Incapacitated adult.

††††† (3) For an AFDC-related Medicaid case, a thirty (30) dollar and one-third (1/3) deduction of earned income shall be allowed in accordance with 921 KAR 2:016.

††††† (4) Income disregards. The income disregards:]

††††† (a) An ABD Medicaid case shall be the applicable federal SSI disregards pursuant to 42 U.S.C. 1382a(b).[; and]

††††† (b) A Medicaid Works individual shall be the applicable federal SSI disregards pursuant to 42 U.S.C. 1382a(b).

 

††††† Section 3.[4. Income of the Stepparent or Parent of a Minor Parent referred to as a "Grandparent". An incapacitated stepparent's income, or a grandparent's income, shall be considered in the same manner as for a parent if the stepparent or grandparent is included in the family case. If the stepparent or grandparent living in the home is not being included in the family case, the stepparent's gross income shall be considered available to the spouse or the grandparent's gross income shall be considered available to the minor parent in accordance with the requirements established in this section. The following disregards and exclusions from income shall be applied:

††††† (1) The first ninety (90) dollars of the gross earned income of the stepparent or grandparent who is employed full time or part time;

††††† (2) An amount equal to the appropriate income limitations scale established in Section 2 of this administrative regulation for the appropriate family size, for the support of the stepparent or grandparent and other individuals (not including the spouse or minor parent) living in the home whose needs are not taken into consideration in the Medicaid eligibility determination but are claimed by the stepparent or grandparent as dependents for purposes of determining federal personal income tax liability;

††††† (3) Any amount actually paid by the stepparent or grandparent to an individual not living in the home who is claimed by him as a dependent for purposes of determining his personal income tax liability;

††††† (4) A payment by the stepparent or grandparent for alimony or child support with respect to an individual not living in the household;

††††† (5) Income of a stepparent or grandparent receiving SSI; and

††††† (6) Verified medical expenses for the stepparent or grandparent and his dependents in the home.

 

††††† Section 5.] Lump Sum Income. Except as established in Section 8 of this administrative regulation, for a Medicaid case, lump sum income shall be considered as income in the month received.

 

††††† Section 4.[6.] Income Exclusions. (1) Income of a person who is blind or disabled necessary to fulfill a[an approved] plan approved by the United States Social Security Administration to achieve self support, IRWE deduction, or BWE[for achieving self-support (PASS), impairment related work expense (IRWE) deduction, or the blind work expense (BWE)] deduction shall be excluded from consideration.

††††† (2) A payment or benefit from a federal statute, other than SSI benefits, shall be excluded from consideration as income if precluded from consideration in SSI determinations of eligibility by the specific terms of the statute.

††††† (3) A cash payment intended specifically to enable an applicant or recipient to pay for medical or social services shall not be considered as available income in the month of receipt.

††††† (4) A Federal Republic of Germany reparation payment shall not be considered available in the eligibility or post eligibility treatment of income of an individual in a nursing facility or hospital or who is receiving home and community based services under a waiver program.

††††† (5) A Social Security cost of living adjustment on January 1 of each year shall not be considered as available income for a qualified Medicare beneficiary, specified low-income Medicare beneficiary, qualified disabled and working individual, or Medicare qualified individual group 1 (QI-1) until after the month following the month in which the official poverty income guidelines[guideline] promulgated by the United States Department of Health and Human Services are[U.S. Government][is] published.

††††† (6) Any amount received from a victimís[victims] compensation fund established by a state to aid victims of crime shall be excluded as income.

††††† (7) A veteran or the spouse of a veteran residing in a nursing facility who is receiving a Veterans Administration (VA) pension benefit shall have ninety (90) dollars:

††††† (a) Excluded as income in the Medicaid eligibility determination; and

††††† (b) Excluded as income in the post eligibility determination process.

††††† (8) Veterans Administration payments for unmet medical expenses[(UME)] and aid and attendance[(A&A)] shall be excluded in a Medicaid eligibility determination for a veteran or the spouse of a veteran residing in a nursing facility.

††††† (a) Veterans Administration payments for unmet medical expenses[(UME)] and aid and attendance[(A&A)] shall be excluded in the post eligibility determination for a veteran or the spouse of a veteran residing in a nonstate-operated nursing facility.

††††† (b) Veterans Administration payments for unmet medical expenses[(UME)] and aid and attendance[(A&A)] shall not be excluded in the post eligibility determination process for a veteran or the spouse of a veteran residing in a state-operated nursing facility.

††††† (9) An Austrian Social Insurance payment based, in whole or in part, on a wage credit granted under Sections 500-506 of the Austrian General Social Insurance Act shall be excluded from income consideration.

††††† (10) An individual retirement account, KEOGH plan, or other tax deferred asset shall be excluded as income until withdrawn.

††††† (11) Disaster relief assistance shall be excluded as income.

††††† (12) Income which is exempted from consideration for purposes of computing eligibility for the comparable money payment program (AFDC or[and] SSI) shall be excluded.

††††† (13) In accordance with 42 C.F.R. 435.122 and Section 4735 of Pub.L. 105-33, a payment made from a fund established by a settlement in the case of Susan Walker v. Bayer Corporation or payment made for release of claims in this action shall be excluded as income.

††††† (14) In accordance with 42 C.F.R. Part 130[435.122], any payment received by a person with hemophilia from a class action lawsuit entitled "Factor VIII or IX Concentrate Blood Products Litigation" shall be excluded as income.

††††† (15) Family alternatives diversion payments shall be excluded as income.

††††† (16)[For an AFDC or family-related Medicaid case, a Medicaid recipient shall have the option to receive a one (1) time exclusion of two (2) months of earned income for new employment or increased wages acquired after approval and reported timely.

††††† (17) For an AFDC-related or a family-related Medicaid case, interest and dividend income shall be excluded.

††††† (18)] All monies received by an individual from the Tobacco Master Settlement Agreement[Tobacco Settlement between the states and tobacco manufacturers] shall be excluded.

††††† (17)[(19)] Income placed in a qualifying income trust established in accordance with 42 U.S.C. 1396p(d)(4)[1936p(d)(4)] and 907 KAR 20:030[1:650], Section 3(5), shall be excluded.

 

††††† Section 5.[7.] Consideration of Mandatory or Optional State Supplements[State Supplementary Payments]. For an individual receiving a mandatory or optional state supplement[state supplementary payment], that portion of the individual's income which is in excess of the basic maintenance standard, [(]established in Section 1(1)[2(1)] of this administrative regulation,[)] shall be applied to the special need which results in the supplement[supplementary payment].

 

††††† Section 6.[8.] Pass-through Cases. (1)(a) An increase in a Social Security payment shall be disregarded in determining eligibility for Medicaid benefits if:

††††† 1. The increase is a cost of living increase; and

††††† 2. The individual would otherwise be eligible for an SSI benefit, mandatory state supplement, or optional state supplement[or state supplementary payment].

††††† (b) An individual who would otherwise be eligible for an SSI benefit, mandatory state supplement, or optional state supplement[or state supplementary payment] shall remain eligible for the full scope of program benefits with no spend-down requirements, as established in Section 7[9] of this administrative regulation.

††††† (2) For an individual who applied by July 1, 1988, the additional amount specified in 42 U.S.C. 1383c(b) shall be disregarded, meaning that amount of Social Security benefits to which a specified widow or widower was entitled as a result of the recomputation of benefits effective January 1, 1984, and except for which (and subsequent cost of living increases) an individual would be eligible for federal SSI benefits.

 

††††† Section 7.[9.] Spend-down Provisions. (1) A technically eligible individual or family shall not be required to utilize protected income for medical expenses before qualifying for Medicaid.

††††† (2)(a) An individual with income in excess of the basic maintenance scale established in Section 1(1)[2(1)] of this administrative regulation shall[may] qualify for Medicaid in any part of a three (3) month period in which medical expenses incurred have utilized all excess income anticipated to be in hand during that period.

††††† (b)[(3)] Medical expenses incurred in a period prior to the quarter for which spend-down eligibility is being determined shall[may] be used to offset excess income if the medical expenses remain unpaid at the beginning of the quarter and have not previously been used as spend-down expenses.

 

††††† Section 8. Individual Retirement Account. (1)(a) If an individual reaches the point where the individual is eligible to begin withdrawing from an IRA without suffering a penalty, the individual shall begin withdrawing from the IRA at least the minimum amount determined by the financial institution holding the IRA.

††††† (b) If an individual does not begin withdrawing from an IRA pursuant to paragraph (a) of this subsection, the individual shall be ineligible for Medicaid benefits.

††††† (2) If an individual withdraws funds from an IRA prior to reaching the point where the individual would suffer no penalty for withdrawing funds, the withdrawal shall be considered non-recurring lump sum income.

††††† (3) If an individual withdraws income pursuant to subsection (1)(a) of this section, the income shall be prorated over the period of time the income covers (for example monthly, quarterly, or annually).

 

††††† Section 9. Applicability.[(1)] The provisions and requirements of this administrative regulation shall:

††††† (1)[(a)] Apply to:

††††† (a)[1.] A child in foster care;

††††† (b)[2.] An aged, blind, or disabled individual; and

††††† (c)[3.] An individual who receives supplemental security income benefits; and

††††† (2)[(b)] Not apply to an individual[:]

††††† [1.] whose Medicaid eligibility is determined:

††††† (a) Using the modified adjusted gross income standard pursuant to 907 KAR 20:100; or

††††† (b) Pursuant to 907 KAR 20:075[2. Between the ages of nineteen (19) and twenty-six (26) years who:

††††† a. Formerly was in foster care; and

††††† b. Aged out of foster care while receiving Medicaid coverage].

††††† [(2) An individual whose Medicaid eligibility is determined using a modified adjusted gross income as the eligibility standard shall be an individual who is:

††††† (a) A child under the age of nineteen (19) years, excluding children in foster care;

††††† (b) A caretaker relative with income up to 133 percent of the federal poverty level;

††††† (c) A pregnant woman, with income up to 185 percent of the federal poverty level, including the postpartum period up to sixty (60) days after delivery;

††††† (d) An adult under age sixty-five (65) with income up to 133 percent of the federal poverty level who:

††††† 1. Does not have a dependent child under the age of nineteen (19) years; and

††††† 2. Is not otherwise eligible for Medicaid benefits; or

††††† (e) A targeted low income child with income up to 150 percent of the federal poverty level].

 

LAWRENCE KISSNER, Commissioner

AUDREY TAYSE HAYNES, Secretary

††††† APPROVED BY AGENCY: January 13, 2014

††††† FILED WITH LRC: January 14, 2014 at 1 p.m.

††††† CONTACT PERSON: Tricia Orme, Office of Legal Services, 275 East Main Street 5 W-B, Frankfort, Kentucky 40601, phone (502) 564-7905, fax (502) 564-7573, email tricia.orme@ky.gov.