Medical Assistance for Long-Term Care Services

2.4.2.5.1 LTC Income Calculation Deductions

Certain deductions from countable gross income are allowed in the long-term care (LTC) income calculation to determine the amount a person is required to contribute toward the cost of LTC services, if any. Deductions, like income, count in the month in which they occur. Deductions must be verified at each request for Medical Assistance for Long-Term Care Services (MA-LTC), at each renewal, and when a change is reported.

A person’s eligibility for MA-LTC is not denied or closed if the person does not provide required proof of a deduction. However, the deduction is not used in the LTC income calculation if it is not verified.

The following deductions are subtracted from gross countable income in the LTC income calculation in the order listed below:

  1. Special Supplemental Security Income (SSI) Deduction

  2. Minnesota Supplemental Aid (MSA) Deduction

  3. Special Personal Allowance from earned income

  4. Medicare premiums paid by the enrollee

  5. Applicable LTC Needs Allowance

  6. Fees paid to a guardian, conservator, or representative payee

  7. Community Spouse Income Allocation

  8. Family Allocation

  9. Court-ordered child support

  10. Court-ordered spousal maintenance

  11. Health insurance premiums, co-payments and deductibles

  12. Remedial Care Expense

  13. Medical expenses

Special Supplemental Security Income (SSI) Deduction

Supplemental Security Income (SSI) payments received by an enrollee are deducted in the LTC income calculation.

Minnesota Supplemental Aid (MSA) Deduction

Minnesota Supplemental Aid (MSA) payments received by en enrollee are deducted in the LTC income calculation.

Special Personal Allowance from Earned Income

A special personal allowance from earned income are deducted for a person who is:

  • certified disabled by SSA or the State Medical Review Team (SMRT);

  • employed under an Individual Plan of Rehabilitation; and

  • living in an LTCF.

The following deductions are applied in the order listed but cannot reduce income to less than zero:

  • The first $80 of earned income

  • Actual FICA tax withheld

  • Actual transportation costs

  • Actual employment expenses, such as tools and uniforms

  • State and federal taxes if the person is not exempt from withholding

Medicare Premiums

Medicare premiums incurred by an enrollee are deducted when not paid by another program. Medicare premiums paid by another program include:

  • The county, state or tribal agency reimburse to the enrollee

  • Paid through the Medicare Buy-In

  • Paid through Medicare Part D Extra Help

LTC Needs Allowances

One of the following allowances is deducted:

Clothing and Personal Needs Allowance (PNA)

The Clothing and Personal Needs Allowance (PNA) is used when the enrollee is not eligible for any of the other LTC needs allowances. The PNA is adjusted each year on January 1.

Veteran’s Improved Pension

A $90 veteran’s improved pension is available to people who are:

  • veterans but who do not have a spouse or dependent child(ren)

  • the surviving spouse of a veteran who does not have a dependent child(ren)

Home Maintenance Allowance (HMA)

A person who is eligible for the HMA is also eligible for the PNA. The Home Maintenance Allowance (HMA) amount, listed in Appendix F, combines the allowed amount for home maintenance with the PNA. The HMA is adjusted each year on July 1.  

 

The HMA is used when all of the following apply:

  • the person lives in an LTCF;

  • the person is expected to be discharged from the LTCF within three full calendar months from the month in which MA-LTC is requested to begin;

  • the person has expenses to maintain a home (owned or rented) in the community, including room and board charges in group residential housing (GRH) or assisted living; and

  • the person meets one of the following conditions:

    • The person did not live with a spouse, a child under age 21, or a person who could be claimed as a dependent of the person for federal income tax purposes at the time he or she was admitted to an LTCF.

    • The person lived with a spouse at the time he or she was admitted to an LTCF, and the person’s spouse was admitted to an LTCF on the same day.

Only one spouse can receive the HMA when both spouses live in an LTCF. The HMA is used for the spouse for which it is most advantageous.

Eligibility for the HMA is based on the anticipated discharge date at the time eligibility for MA-LTC is determined. Eligibility for the HMA is not delayed to see if the person will actually be discharged on the anticipated discharge date and is not retroactively adjusted if the person lives in the LTCF for more than three full calendar months.

A person must be discharged from an LTCF for a full calendar month before the HMA may be used again.

Special Income Standard Elderly Waiver (SIS-EW) Maintenance Needs Allowance (MNA)

The Special Income Standard Elderly Waiver (SIS-EW) maintenance needs allowance (MNA) is used for people requesting Elderly Waiver (EW) services and who have income at or below the Special Income Standard (SIS). The SIS-EW MNA is updated annually in July. The SIS-EW MNA is not used for a person with income above the SIS.

When an SIS-EW enrollee moves to or from an LTCF:

  • The PNA or veteran’s improved pension allowance is used beginning the month following the month the SIS-EW enrollee moves into the LTCF.

  • The SIS-EW MNA is used beginning the month following the month the person is discharged from the LTCF and begins receiving EW services.

Fees Paid to a Guardian, Conservator, or Representative Payee

Five percent of the enrollee’s gross monthly income, up to a maximum of $100, for fees paid to a guardian, conservator or representative payee is deducted. This deduction cannot be increased over $100 even if a higher amount is allowed to be paid by SSA or a court.

Community Spouse Income Allocation

An LTC spouse may allocate a portion of their income to the community spouse when the community spouse’s income is insufficient to meet their monthly maintenance needs. The community spouse income allocation is calculated by comparing the community spouse’s gross monthly income to the minimum monthly allowance plus any excess shelter costs. The income allocation cannot exceed the maximum monthly allowance.

The community spouse’s gross monthly income includes all earned and unearned income, including income received from income-producing assets. No exclusions, disregards or deductions apply. If the community spouse’s gross monthly income is greater than or equal to the community spouse’s monthly maintenance needs, the community spouse does not qualify for an income allocation. If the community spouse’s gross monthly income is less than the community spouse’s monthly maintenance needs, the community spouse qualifies for an income allocation.

Calculation of the Community Spouse’s Shelter Costs

The community spouse’s shelter costs, in excess of the basic shelter allowance, are added to the minimum monthly allowance to calculate the community spouse income allocation. Shelter costs include:

  • Rent

  • Mortgage payments, including principal and interest

  • Real estate taxes

  • Homeowner’s or renter’s insurance

  • Required maintenance charges for a cooperative or condominium

  • Utility allowance

The amount of a shelter expense is based on the full amount that the community spouse must pay. Shelter expenses do not include charges for services received by a person who resides in a residential living arrangement. An itemized statement of monthly charges to identify the amount the community spouse must pay for rent or any other shelter expense is required.

Verification Requirements

A community spouse income allocation cannot be deducted unless the person, or their authorized representative, provides verification of the community spouse’s income and shelter expenses at the time of the request for MA-LTC and at each renewal. The community spouse, or the community spouse’s authorized representative, must report and verify changes in the income or shelter expenses of the community spouse.

When to Deduct the Community Spouse Income Allocation

The calculated community spouse income allocation is deducted when there is a community spouse at any time in a given month unless:

  • There is a court order for spousal support for an amount that is greater than the calculated community spouse income allocation. When this occurs, the court ordered amount replaces the community spouse income allocation as a deduction. This only applies when a court order establishes support while the couple remains married. It does not apply to a court order in a divorce action.

  • The LTC spouse does not have enough income remaining, after other allowable deductions, to allocate to the community spouse.

  • Exceptional or unusual circumstances have occurred that result in a temporary financial hardship to the community spouse. In these cases, the community spouse income allocation may be temporarily increased while the community spouse takes the necessary steps to resolve the situation. The increased deduction cannot be applied if the situation is not temporary or the community spouse does not take the needed actions to resolve the situation.

  • The LTC spouse can choose not to make an income allocation to the community spouse. A deduction can only be made if the income is actually made available to the community spouse.

  • The community spouse chooses to accept a reduced income allocation or chooses not to accept any income allocation. The community spouse income allocation is counted as unearned income for the community spouse when determining eligibility for any Minnesota Health Care Program (MHCP). A community spouse may choose to not accept the income allocation if it will result in ineligibility for MA.

Family Allocation

A person may allocate a portion of their income to the following family members who have a calculated need:

  • A minor child, who does not live with a community spouse

  • The following relatives who live with a community spouse:

    • A child under age 21

    • A child age 21 or older who is claimed as a tax dependent

    • Parents who are claimed as tax dependents

    • Siblings who are claimed as tax dependents

Children Not Living with a Community Spouse

A family allocation may be made to the minor children of the person who does not live with a community spouse. The allocation is calculated by adding together the gross monthly earned and unearned income of all minor children not living with a community spouse and comparing it to 100% of the FPG for a family size equal to the number of minor children not living with the community spouse. No exclusions, disregards or deductions apply. The amount of the allocation is the difference between the gross income of the children and the applicable FPG amount. No allocation is allowed if the gross income of the children exceeds the applicable FPG standard.

Family Members Who Live with a Community Spouse

A separate family allocation may be made for each family member who lives with a community spouse. The allocation is calculated by adding together the gross monthly earned and unearned income of the family member who lives with the community spouse and subtracting it from the minimum monthly income allowance for a community spouse. No exclusions, disregards or deductions apply. No allocation is allowed if the gross income of the family member exceeds the minimum monthly income allowance for a community spouse.

Verification Requirements

The family allocation cannot be deducted unless the person, or their authorized representative, provides verification of the family member’s income at the time of the request for MA-LTC and at each renewal. Changes in income for the family member must be reported and verified.

When to Deduct the Family Allocation

A family allocation is deducted in the LTC income calculation in each month that there is a family member eligible to receive an allocation. The family allocation is deducted regardless of whether it is made available to the family member if the income of the family member is verified.

A family allocation is counted as unearned income to the family member when determining eligibility for any MHCP.

Court-Ordered Child Support

Court-ordered child support that is garnished from the person’s income up to a maximum of $250 per month is deducted. The garnishment can be for current child support or arrearages. The garnishment must be verified.

This deduction does not apply when a family allocation is deducted for the child for whom the court-ordered child support obligation is due unless the calculated family allocation is less than $250. The difference between the calculated family allocation and $250 may be deducted.

Court-Ordered Spousal Maintenance

Court-ordered spousal maintenance is deducted for people who reside in a long-term care facility (LTCF) when the spousal maintenance is:

  • court-ordered under a judgement and decree for dissolution or marriage; and

  • garnished from a source of the person's income

In addition to the spousal maintenance amount, the fees associated with the garnishment can be deducted if also garnished from the person's income.

The garnishment of spousal maintenance and fees must be verified.

Health Insurance Premiums, Co-payments and Deductibles

The cost of health insurance premiums, co-payments and deductibles incurred by the person that are not subject to payment by MA or a third party, including Extra Help through SSA for Medicare Advantage Plan or Part D coverage or premium reimbursement through MA, are allowable deductions. Health insurance includes Medicare Advantage plans, dental and LTC insurance policies. Only the portion of the premium that reflects coverage for the person is an allowable deduction.

Remedial Care Expense

A remedial care expense deduction is an amount allowed for people who reside in a residential living arrangement or a housing with services establishment where a county agency has a GRH agreement. The amount can change twice a year, on January 1 and July 1.

Medical Expenses

Verified medical expenses incurred by the person that meet the criteria below are deductions in the LTC income calculation:

The medical expenses must be medically necessary and recognized under state law

Medically necessary expenses include medical services, supplies, devices or equipment that are provided in any of these situations:

  • In response to a life-threatening condition or pain

  • To treat an injury, illness or infection

  • To achieve a level of physical or mental function consistent with prevailing community standards for the diagnosis or condition

  • To care for a mother and child through the maternity period

  • To provide preventive health service

  • To treat a condition that could result in physical or mental disability

People are not required to provide proof of medical necessity for a medical expense provided by a medical provider, such as a pharmacist or medical facility. These services are assumed to be medically necessary.

The medical expenses must not be covered by MA

Medical expenses for MA covered services that the person incurred in a month that MA will pay because the person is, or will be, approved for MA are not deductions. A medical expense incurred in a month in which the person is or will be an MA enrollee is assumed an MA covered service unless the person provides proof that it is not.

Medical expenses that are included in the daily rate that MA pays to a Skilled Nursing Facility (SNF) or an Intermediate Care Facility for the Developmentally Disabled (ICF/DD) are medical expenses that MA will pay.

The medical expenses must not be covered by a third party

A medical expense is not a deduction if it is subject to payment by a third party. Third parties include people, entities or benefits that are, or may be, liable to pay the expense. This includes:

  • Other health care coverage, such as coverage through Medicare, private or group health insurance, long-term care insurance or through the Veterans Administration (VA) health system

  • Automobile insurance

  • Court judgments or settlements

  • Workers’ compensation benefits

The person must provide proof of the exact amount of the third party payment, such as an Explanation of Medical Benefits (EOMB) statement. The person can also sign a release form so the county, tribal, or state agency can contact the third party directly.

If not yet known, the amount of the medical expense that will be covered by a third party is estimated at the time of the eligibility determination so that application processing is not delayed. The LTC income calculation is adjusted for the applicable month once the actual amount of the expense is verified. If not verified before, the person must provide proof of the actual amount of estimated medical expenses that were used in the LTC income calculation at the time of their next renewal. The deduction is removed from the applicable month if proof is not provided.

The medical expense was incurred during a month in which the person is receiving MA-LTC or during any of the three months prior to the month in which the person requested MA-LTC

Deductions are allowed for verified medical expenses the person incurred during the month the person requested MA-LTC or while the person is receiving MA-LTC, regardless of whether retroactive MA coverage was requested or approved. Medical expenses incurred during a retroactive month must be unpaid as of the date of the request for MA-LTC. Medical expenses incurred during the month the person requested MA may be paid or unpaid.

Medical Expenses not Allowed as a Deduction

Medical expenses are not allowed as a deduction when:

  • The medical expense is for LTC services incurred in a month that is included in a transfer penalty period or period of ineligibility for failure to name Minnesota Department of Human Services (DHS) a remainder beneficiary of certain annuities.

  • The person paid the medical expense to reduce excess assets.

  • The medical expenses were incurred more than three months before the month of application associated with the current period of eligibility.

  • The nursing facility expenses were incurred without a required preadmission screening.

  • The medical expense was previously used:

    • As a deduction in an LTC income calculation. However, the amount of a medical expense that exceeds the amount of the person’s income remaining after all other deductions in one month can be carried forward to future months

    • To meet a medical spenddown

The following services received by a person who lives in an LTCF are not medical expenses:

  • Personal care items such as shampoo, toothpaste or dental floss that are included in the daily rate (also referred to as a “per diem rate”) paid through MA

  • Oral hygiene instruction

  • Certain house/extended care facility call charges. A charge for a provider to travel to a person’s residence is not an allowable medical expense deduction unless the provider delivers a medical service on the same day.

  • A charge for a provider to travel to a person’s residence is also not an allowable medical expense deduction if the LTCF pays the cost for the provider to travel to the LTCF through an agreement between the LTCF and the provider.

  • The additional charge for a private room in a skilled nursing facility (SNF) when it is not medically necessary.

Notification

People who report medical expenses must be notified of the:

  • Medical expenses that were not allowed as a deduction and the reason(s) why they were not allowed

  • Medical expenses that were deducted in the LTC income calculation based on estimated third party payments

  • Amount of the allowed medical expense deduction

  • Amount of medical expenses that can be carried forward as a deduction to future months

Legal Citations

Code of Federal Regulations, title 42, section 483.10(f)

Code of Federal Regulations, title 42, section 483.10(h)

Minnesota Statutes, section 256B.0575

Minnesota Statutes, section 256B.058

Minnesota Statutes, section 256B.0915

Minnesota Statues, section 256B.35

Minnesota Statutes, section 256I.03