As we have discussed most recently in our August issue of Elder Law Today, when a single person is approved for Medicaid benefits, they are required to pay a share of their cost for the nursing home. This is called a patient pay amount (PPA) and it is based upon a person’s gross income (i.e. pension and Social Security income) minus a limited number of allowances. These include a personal needs allowance of $60.00, health insurance premium allowance, a $60.00 guardianship/conservatorship expense allowance and in rare cases, family and children allowances. Unfortunately, there is generally no offset for home related expenses such as property taxes or utilities. Typically, the PPA is calculated as follows:
Social Security income: $1000.00
Pension income: + $500.00
personal needs allowance: -$60.00
Medicare supplement: –$110.00
Patient Pay Amount: =$1330.00
Thanks to a lawsuit seeking to require the State of Michigan to comply with federal law, an amendment recently has been approved to allow for an offset from a medicaid recipient’s patient pay amount of certain unpaid medical expenses incurred before medicaid approval. However, unlike the allowances mentioned above, the offset for unpaid medical expenses are not applied by the Department of Human Services (DHS) caseworker. Rather, the Department of Community Health (DCH) determines whether an offset is allowable only after it is first requested by the Medicaid applicant. While DHS has made obtaining the offset for pre-eligibility medical expenses (PEME) somewhat difficult, it certainly is possible provided unpaid medical expenses meet these conditions:
- The unpaid medical expense must be incurred in the three months prior to Medicaid eligibility.
- The unpaid medical expense cannot be covered by a third party source (public or private).
- The unpaid medical expense cannot be from a month in which a divestment penalty has been imposed.
- It must be reported prior to the first re-determination for medicaid eligibility (i.e. within 1 year)
- It will be terminated if medical provider is not paid with the funds.
This rule provides much needed assistance for those nursing home residents who have incurred unpaid medical expenses before qualifying for medicaid benefits. Previously, all but $60.00 of Medicaid recipient’s income would be paid to the nursing home – leaving little ability to pay medical expenses that were incurred prior to entering the nursing home. Absent financial support from loved ones, these medical expenses might not get paid. Thankfully, Medicaid recipiants can now offset these unpaid medical expenses from their patient pay account.