Medicaid (MA)

Each year, the Social Security Administration makes a cost of living adjustment that increases the benefits paid to individuals who receive Retirement, Survivors, or Disability Insurance Social Security benefits (RSDI).  The increase begins with the benefits for December, which are paid the following January.  The increase in RSDI is based on the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) .

Each year the federal government also makes a cost of living adjustment to the federal poverty levels, which is published in the Federal Register, usually some time between late January and early March.  The federal poverty levels are effective upon publication.  The increase in the federal poverty level is based on the increase in the Consumer Price Index for all Urban Consumers (CPI-U). 

ADCare and Healthy Kids Medicaid categories have income limits that are based on the federal poverty level, as do the Medicare Savings Programs (QMB, SLMB, ALMB), and the MIChild program.  In addition, the unearned income limit for the Freedom to Work Medicaid eligibility category is base on the federal poverty level.  

In past years, the Department of Human Services has increased the income limits for Healthy Kids and ADCare Medicaid in January based on an estimate of the increase in the FPL, thus preventing gaps in, or denials of, Medicaid for recipients whose families receive Social Security and whose eligibility is redetermined during in January, February, or March.  DHS typically publishes new income limits based on the published FPL in April.

This year, the RSDI cost of living adjustment resulted in a 5.8% increase in Social Security benefits.  The federal poverty levels, however, increased by only about 4%.  Because the RSDI increase is greater than the increase in federal poverty levels, many Medicaid, MIChild, and Medicare Saving Program recipients will lose their eligibility.

In addition, this year DHS did not issue higher income limits based on the estimated increase in the federal poverty level, and it looks like they do not plan to issue increased income levels until April.  This may result in improper Medicaid terminations or denials for individuals whose eligibility is determined or redetermined in January, February, or March 2009. 

EXAMPLES- EFFECTS OF RSDI COST OF LIVING ADJUSTMENT:

For example, the income limit for ADCare and the unearned income limit for Freedom to Work Medicaid is 100% of the federal poverty level, which was $867 per month in 2008 and is $903 in 2009.   A recipient of Social Security disability benefits who received $855 per month in 2008 will receive $904 per month in 2009 after the 5.8% cost of living adjustment.   As a result of the cost of living adjustment, the Social Security disability recipient will be ineligible for both ADCare and Freedom to Work Medicaid.

Similarly, a senior who received $1,155 per month in Social Security retirement benefits in 2008 will receive $1,222 in 2009.  She would have qualified for ALMB Medicare cost sharing to pay her premiums in 2008 because the income limit was $1,170 (135% of the federal poverty guideline).  In 2009, however, she will lose her Medicare Savings Program eligibility because the income limit (135% of the federal poverty level) will be $1,218.  

Likewise, many children who receive Social Security benefits because their parent is disabled or deceased, or whose parent(s) receive Social Security benefits also will be at risk of losing Health Kids Medicaid due to the cost of living adjustments.

EXAMPLE: EFFECTS OF DELAY IN INCREASING INCOME GUIDELINES

February and March because Michigan has not raised its income limits.

WHAT CAN BE DONE?

Applicants, recipients, and advocates can request hearings to challenge Medicaid denials or termination that occur because Michigan has not increased its income limits to reflect the higher federal poverty levels for 2009. 

To prevent current recipients from losing Medicaid, Michigan’s Medicaid agency could amend its Medicaid State Plan and change state policy to disregard the RSDI cost of living adjustments received by current recipients.    This would prevent individuals from losing Medicaid because of cost of living adjustments, without increasing the Medicaid caseload.

REAL LIFE EXAMPLES

If you are an advocate working with a client who loses Medicaid or Medicare Savings Program eligibility because of the RSDI cost of living adjustment, please share their story with CCJ (see the top of the alert for contact information).    Please tell us the county where the client lives, the monthly amount of their RSDI (before deductions) in 2008 and 2009, and a short description of their medical problems and the hardship they will suffer because their Medicaid or Medicare Savings Program coverage is ending.   We do not need the client’s name or contact information if they do not want to share it.

FEDERAL POVERTY LEVELS FOR 2009  (also see http://aspe.hhs.gov/poverty/09poverty.shtml)

1.  Be alert to individuals who are terminated from Medicaid because of Social Security cost of living increases.

2.  Help clients request hearings or re-apply for Medicaid if they have been terminated from Medicaid categories in January, February, or March because of delays in raising income limits to reflect the new federal poverty levels.

3.  Share your clients’ stories with CCJ.

4.  Encourage clients harmed by the COLA to contact their legislators.

1.  Ask for a hearing right away if you believe you are being improperly terminated from Medicaid because the income limits have not been increased.

Most legal aid and legal services offices handle these types of cases, and they do not charge a fee.

You can locate various sources of legal and related services, including the free legal aid office that serves your county, at MichiganLegalAid.org.

You can also look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738.