Six-Month Spenddown Example (Archive)

Luther lives with his five-year-old daughter, Nica. He is applying for MA in February for both Nica and him and is requesting one month of retroactive coverage. Luther has a parent basis of eligibility. Nica’s basis of eligibility is children under age 21. The household size is two for both Luther and Nica. Luther is working full-time. He also receives spousal support each month but it is court-ordered to end in March. Nica receives child support that will continue until she is 18.

Luther has a total net monthly income amount of $1,500 for January through March and $1,200 for April through June. Nica’s total net monthly income is $450 from child support. Luther’s total six-month net income is $8,100 and Nica’s is $10,800 ($8,100 deemed from Luther + $2,700 from child support).

Action:

Determine if both Luther and Nica are eligible using a six-month spenddown before considering a monthly spenddown.

Determine Luther’s eligibility using the 100% FPG standard, which is the spenddown standard for the parent basis of eligibility.  

Because of Nica’s age, first compare Nica’s net income to the 150% FPG.  If her net income is above that standard compare her net income to the 100% FPG standard, which is the spenddown standard for the children under age 21 basis of eligibility. The monthly 150% FPG standard for a household size of two is $1,750 and the six-month amount is $10,500. The monthly 100% FPG standard for a household of two is $1,167 and the six-month amount is $7,002.

Note:  This example uses the 2009 FPG. The FPG standards are updated each year on July 1.

Luther provided the following verified health care expenses:

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Action:

Add all income and medical expense information into the appropriate MAXIS STAT panels. MAXIS will follow these steps when it determines eligibility for Luther and Nica.

1. Determine the anticipated income for each month of the certification period of January through June. Luther has a total net monthly income of $1,500 for January through March and $1,200 per month for April through June. Nica’s total net monthly income is $450.

2. Determine the net total income for all six months of the certification period:  Luther’s six-month net income is $8,100 ($1,500 X 3 months = $4,500) + ($1,200 X 3 months = $3,600). Nica’s six-month net income is $10,800 ($450 x 6 months = $2,700 + $8,100 deemed from Luther).

3. Determine the appropriate six-month FPG standard.

Since Nica’s six-month net income ($10,800) is greater than the six-month 150% FPG standard ($10,500) use the 100% FPG spenddown standard. Luther’s net income is below above the 100% FPG standard. Determine both Luther’s and Nica’s eligibility using the six-month 100% FPG standard.

4. Determine the six-month spenddown amount using the applicable spenddown standard.

Luther's six-month spenddown amount is:

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Nica's six-month spenddown amount is:

5. Determine if Luther and Nica meet the six-month spenddown with the verified health care expenses that Luther provided.

The bills are applied on a specific date for specific bill types. Determine spenddown eligibility starting with the household member with the smallest spenddown.

a. For six-month spenddowns, total all verified H bills from any retroactive months and any months included in the processing period and apply the total to the first day of the certification period.

Apply $100 for January and $100 for February for the health insurance premium Luther pays for Nica.

Luther's spenddown:

Nica's spenddown:

b. Apply M bills in the order they were incurred on the first day of the certification period.

Luther's spenddown:

Nica's spenddown:

c. Apply P bills to the first day of the certification period.

Luther's spenddown:

Nica's spenddown:

d. Apply R bills based on the date of service.

Luther's spenddown:

Luther has met his six-month spenddown. Let's see if Nica meets her six-month spenddown.

Nica's spenddown:

The medical clinic bill that Luther incurred on 01/15/this year cannot be used to help Nica meet her spenddown because he met his spenddown on 01/12; MA will pay the 01/15 medical clinic bill. Nica cannot meet her spenddown.

Nica’s emergency room bill incurred on 1/12/this year becomes a P bill because she does not meet her spenddown. Enter this bill in MAXIS. Discuss spenddown options with Luther.  

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6. Luther's satisfaction date is January 12, the day he meets or exceeds his spenddown amount.

The recipient amount is $73. This is the difference between the spenddown amount and the total amount of medical expenses applied through the day before the satisfaction date.

$1,098 spenddown amount - $1,025 in applied bills = $73.

Luther is eligible for MA through June 30.

Deny MA for Nica.

7. Luther is sent notification of his spenddown amount, which states he is responsible for all bills prior to January 12 and that $73 of claims billed to DHS with a service date of January 12 will also be rejected and will be his responsibility to pay. Luther should request the doctor submit the bill to MA.

He will receive an EOMB indicating to whom he should pay the $73.

8. Update MMIS with the spenddown amount ($1,098), satisfaction date (January 12) and the recipient amount ($73). MMIS will deny claims received with a date of service prior to January 12 and $73 of claims with a service date of January 12 or later.

Spenddown Options for Luther

Discuss the following spenddown options with Luther.  If his intent when applying for MA was to have MA cover Nica’s emergency room bill, look at a monthly spenddown instead of the six-month spenddown to see if Nica could meet a monthly spenddown. Nica’s January monthly spenddown amount is $1,950 and Luther’s is $1,500.

For the January spenddown:

Apply H bills. Apply only the $100 health insurance premium for January; do not apply the February premium to January’s spenddown.

Nica's:

Luther's:

Apply M bills in the order they were incurred on the first day of the certification period.

Nica’s:

Luther's:

Apply P bills to the first day of the month in which it was incurred.

Nica’s:

Luther's:

Apply R bills based on the date of service.

Nica’s:

Luther's:

Both Luther and Nica meet January’s monthly spenddown with Nica’s emergency room bill from 1/12. Nica’s satisfaction date is 1/12 and her recipient amount $1,025. Luther’s satisfaction date is also 1/12 and his recipient amount is $575. They will be responsible for $1,025 of the $1,200 emergency room bill on 1/12. The only reported and verified bill remaining to apply to the monthly spenddown amounts in the remaining months of the certification period is the health insurance premium. However, since they met the spenddown in at least one month of the processing period, they could be approved for MA with a monthly spenddown. Then if they incur other medical expenses in the certification that exceed the monthly spenddown amounts MA would cover the amount of the medical expense over the spenddown amount.

Discuss MinnesotaCare coverage with Luther; however, Nica might not be eligible due to her other health insurance.

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