Medical Assistance for Long-Term Care Services

2.4.2.5 Income Calculations for Long-Term Care Services

Income Calculations

There are two income calculations used to determine what amount, if any, a person must contribute from their income toward the cost of their long-term care (LTC) services. People whose Medical Assistance (MA) eligibility is determined using an MA for People Who Are Age 65 or Older and People Who Are Blind or Have a Disability (MA-ABD) basis of eligibility may have to make an income contribution toward the cost of their LTC services. People whose MA eligibility is determined using an MA for Families with Children and Adults (MA-FCA) basis of eligibility are not required to make an income contribution toward the cost of their LTC services.

The type of calculation used to determine the amount of an income contribution is either a community income calculation or an LTC income calculation.

Community Income Calculation

A community income calculation determines the amount, if any, of the income contribution for people that:

  • Request home and community-based services (HCBS) through a waiver program for persons with disabilities (Brain Injury (BI), Community Alternative Care (CAC), Community Access for Disability Inclusion (CADI), Developmental Disabilities (DD))

  • Request HCBS through the Elderly Waiver (EW) program and have gross income above the Special Income Standard (SIS) but do not have a community spouse

  • Are expected to reside in a long-term care facility (LTCF) for less than 30 consecutive days

A community income calculation is determined using the MA-ABD income methodology and may result in a medical spenddown. The person can use the cost of their LTC services to meet the medical spenddown, if applicable.

A community income calculation is also used for the months a person requests MA coverage prior to the month in which LTC services begin.

LTC Income Calculation

A LTC income calculation determines the amount, if any, of the income contribution for people that:

  • Are expected to reside in a LTCF for at least 30 consecutive days

    • An MA enrollee who is absent from an LTCF on a leave day is still considered to be residing in a LTCF.

    • A Group Residential Housing (GRH), assisted living, or a non-Medicaid certified facility, is not an LTCF.

  • Request EW and have income at or below the SIS

  • Request EW and have income above the SIS and have a community spouse

A LTC income calculation starts with the amount of a person’s  total income and applies certain deductions. This calculation may result in an LTC spenddown, waiver obligation or medical spenddown. The LTC income calculation determines the LTC spenddown, waiver obligation or medical spenddown, if any, based on anticipated total income and deductions for each month of a six-month period.

The person is responsible for payment of the amount of the LTC spenddown or waiver obligation, if any, toward the cost of their LTC services.

Total Income

The anticipated amount of a person’s total income is used in the LTC income calculation in the month it is expected to be received. Total income includes the gross amount of income a person receives from any source, except:

  • Excluded Income

  • The person's spouse's income

  • Sponsor Income if the sponsor is the person's community spouse

  • LTC insurance payments (LTC insurance payments are considered third-party liability)

Total income is not averaged or annualized; it is a month by month calculation. The Retirement, Survivors, Disability Insurance (RSDI) cost of living adjustment (COLA) disregard is not applied in the LTC income calculation.

Total income must be verified at each request for MA-LTC, at each renewal and when a change is reported. People in an LTCF who have earned income in excess of $80 per month must use the Household Report Form (DHS-2120) to report and verify their income monthly.

Retroactive adjustments are made for each month in the six month period of a LTC income calculation where the actual income or deductions differ from the anticipated income or deductions including months in which SSI benefits are retroactively reduced by SSA because the person was in an LTCF, resulting in an SSI overpayment.

Beginning and Ending the LTC Income Calculation

Once a person is found eligible for MA-LTC, the LTC income calculation begins:

  • The month the person with a community spouse begins receiving LTC services

  • The month following the month the person without a community spouse begins receiving LTC services

The LTC income calculation ends:

  • The month the person with a community spouse stops receiving LTC services

  • The month before the month the person without a community spouse stops receiving LTC services

The LTC income calculation continues through the month in which a person who lives in an LTCF or receives EW dies.

LTC Spenddown

The LTC spenddown is the amount a person must contribute toward the cost of LTC services when the person resides in an LTCF.

A person’s MA eligibility cannot be closed for failure to pay the LTC spenddown to the LTCF. A county, tribal or state agency may disqualify an authorized representative who fails to pay the LTCF and assist the person in finding another authorized representative.

Interaction with Medicare Part A Payments

Medicare Part A covers care provided in an LTCF when a person is admitted to the LTCF immediately following three or more consecutive days of hospitalization. In these situations, the MA enrollee must pay the LTC spenddown or the Medicare coinsurance obligation, whichever is less.

The LTC spenddown may be collected before the Medicare payment is known. As a result, the LTCF may have received a higher LTC spenddown than the MA enrollee should have paid. The LTCF may refund the excess LTC spenddown to the MA enrollee or, with the agreement of the MA enrollee, retain the excess spenddown for payment of a past due obligation. Any amount of an LTC spenddown that is refunded to an MA enrollee is treated as follows:

  • The refund is not counted as income or as an asset in the month received.

  • Any amount refunded to the MA enrollee is counted as an asset beginning with the month following the month the refund is received.

If the refund results in the enrollee having excess assets, MA-LTC may be closed.

Waiver Obligation

A waiver obligation is the amount a person must contribute toward the cost of EW services when the person has income at or below the SIS.

  • EW enrollees with a waiver obligation who are enrolled in a managed care plan cannot use the designated provider option.

SIS-EW enrollees who access EW services that cost less than the waiver obligation may keep the income that is not contributed to the cost of their EW services.

Medical Spenddown

A medical spenddown for a person eligible for MA-LTC is the amount the person must contribute toward the cost of LTC services.

Legal Citations

Code of Federal Regulations, title 42, section 435.726

Code of Federal Regulations, title 42, section 435.733

Code of Federal Regulations, title 42, section 435.735

Code of Federal Regulations, title 42, section 435.832

Minnesota Statutes, section 256B.0575

Minnesota Statutes, section 256B.058

Minnesota Statutes, section 256B.0915