Over 30,000 Ohioans Affected by the End of Medicaid “Spend-down” Eligibility

The Ohio Department of Medicaid (ODM) is preparing to change the program’s disability determination process. Starting in July, 2016, the program will have a unified disability determination system, so that individuals who qualify for Supplemental Security Income (SSI) will automatically qualify for Medicaid. (In legal terms, this means the state is implementing section 1634 of the Social Security Act, rather than using section 209(b)). This ends decades of practice in which applicants had to separately navigate a federal administrative process for SSI and a county administrative process for Medicaid. ODM has filed a state plan amendment with the federal Centers for Medicare and Medicaid Services (CMS) to raise the eligibility income threshold for disabled individuals to 75 percent of the federal poverty level, from the current 64 percent.

As part of the change, the current practice of allowing individuals with incomes above eligibility thresholds to use medical bills to “spend down” to achieve Medicaid eligibility will no longer exist. Spend-down takes place on a monthly basis. People can move in and out of eligibility as their income and expenses change. Spend-down can be used to access both institutional care, such as nursing homes, as well as waiver services, such as Home Care, PASSPORT, MyCare, and Assisted Living. With the change, individuals using institutional care or waivers can establish a qualified income trust (QIT), also known as a Miller Trust, in lieu of a spend-down process. The trust receives excess income above the eligibility threshold, and makes payments for medical care. Income left over in the trust after an individual dies is subject to estate recovery. ODM is contracting with a vendor, Automated Health Systems, to contact individuals currently in institutions or on waivers to help them establish a trust.

Advocates have raised many concerns regarding the implementation of this change, including the lack of certain services on the exchange (e.g., vision and dental), the narrow scope of the proposed waiver for behavioral health services, and how affected individuals will be notified and walked through the complicated process of creating a trust. Also, it is still unclear whether standard retroactive 90-day eligibility applies when a Miller Trust is used, and, by law, eligibility cannot start until all of the elements are fulfilled. This could affect an institution’s willingness to admit an individual before eligibility is determined.

In response to questions from advocates, ODM released preliminary data that defines the number of individuals in various service categories that will be affected by the end of spend-down. ODM will refine these numbers each month as the transition date draws nearer. It is important to note that there are also over 14,000 individuals with SSI who are not currently enrolled in Medicaid who will gain coverage due to the change. Also, disabled individuals who are in the community and working can still access the Medicaid buy-in.

ODM data show that nearly 5,500 people are using spend-down and will need a Miller Trust. Nearly 4,700 of this total are in institutions and just over 800 are on waivers.

Separately, on the community side, approximately 25,200 individuals are using spend-down. Of this total, about 12,000 will lose eligibility and are expected to transition to the healthcare marketplace exchange, and over 500 seniors will leave the Medicaid program because their incomes are above 75% of the federal poverty line but they cannot qualify for Medicare premium assistance (QMBY/SLMBY) due to resource limits or other reasons.

Of the community categories that retain Medicaid coverage, the largest number (over 5,000) will qualify under the Medicaid extension (Group 8). Another group of about 3,500 who also have Medicare will qualify for premium assistance (QMBY/SLMBY). In recognition that some of the affected individuals have severe mental illness, ODM is starting a special waiver program (1915i) for individuals who meet certain diagnostic and medical history criteria. A recent Community Solutions paper described this program in more detail. Under the current criteria, about 2,200 individuals will be enrolled in the waiver, but ODM is considering various rule changes that would allow more people to qualify.