H-3300, How to Budget at Application | Texas Health and Human Services

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H-3310 Variable Income

Revision 09-4; Effective December 1, 2009

If the applicant routinely receives variable income that is anticipated to continue, use an average of variable income received during the six months preceding the application file date, or the six months preceding any month up to the certification month, and project that average for the coming six-month period. Schedule a special review for the sixth month after the case is certified to rebudget co-payment.

Examples:

The person applied in January and is being certified in February. The eligibility specialist verifies that the person received variable income totaling $300 from August through January, which is anticipated to reoccur, and obtains an average of $50 per month ($300 ÷ 6 months). This average ($50) is budgeted as variable income in the co-payment calculation. A special review is scheduled for the following August, six months from the certification date.
The person applied in January and is being certified in March. The eligibility specialist has the option of averaging variable income for any one of the following six-month periods:
- July through December (six months prior to January, the month in which the application was filed);
- August through January (six months preceding February, which is a month prior to the March certification month); or
- September through February (six months prior to the certification month of March).

If variable income is received on a monthly basis and is anticipated to continue, the amount to be projected is an average of variable income received during preceding months. If variable income was received during all six of the preceding months, divide the total received by 6; if there are only five months of variable income, divide the total by 5; if there are only four months of variable income, divide the total by 4; and so on.

Examples:

The application was filed in January and is being certified in February. The person began receiving monthly variable income six months ago, in August. Variable income received from July through December totaled $400. The average to be projected over the coming six months is $66.67 ($400 total ÷ 6 months = $66.67). A special review is scheduled for the following August to rebudget variable income.
The application was filed in January and is being certified in February. The person began receiving monthly variable income two months ago, in December. Variable income received for December and January totals $75. The average to be projected over the coming six months is $37.50 ($75 total ÷ 2 months = $37.50). A special review is scheduled for the following August to re-budget variable income.

In spousal impoverishment cases, if the community spouse has variable income that is anticipated to continue, in the co-payment budget use an average of variable income received during the six months preceding the application file date, or the six months preceding any month up to the certification month, and project that average for the coming six-month period. Schedule a special review for the sixth month after the case is certified to rebudget co-payment.

Note: If co-payment is $0 and there is a wide margin of variability for variable income, semi-annual reviews are not required. Variable income should be re-budgeted at each annual redetermination.

Note: Cases with significant month-to-month differences in income amounts should be reviewed quarterly rather than every six months. This quarterly averaging will minimize the impact on a person if he receives income in very low amounts for several months. If the monthly average of variable income from all sources is less than $5, the variable income need not be budgeted for co-payment purposes.

If variable income from all sources was received during at least three of the preceding six months and is anticipated to reoccur, total the variable income received during the preceding six months and divide by six to determine the initial budget. Schedule a special review for the sixth month after the case is worked to rebudget co-payment.

Example: The application is worked in February. The preceding six months are August through January. Variable income totaling $65 from two different sources was received in August, October, December and January and is anticipated to continue. The average to be projected (from March through August) is $10.83 ($65 ÷ 6 months = $10.83).

Spend Down Situations — Amounts of variable income received during preceding months may differ from amounts anticipated for future months. In these situations, obtain a statement of anticipated income amounts from the source, if possible. If the source cannot provide a statement, expected income must be determined based on other information.

Examples:

Interest Income — The applicant entered the nursing facility in September, and her Medicaid application is being worked in February. She owns an interest-bearing bank account, but has been spending down resources since September. The current bank account balance is sufficient to continue generating interest. The eligibility specialist budgets the anticipated interest amount based on the best estimate available, considering the reduced account balance and current interest rates, rather than averaging the interest posted during preceding months when the account balance was much higher. A special review is scheduled for no later than August to reconcile.
Rental Income — The amount of rental income to be projected is a net amount based on gross rents anticipated to be received, less allowable expenses anticipated to be paid, during the six months following the month the case is worked (the month the case is certified).

H-3320 Incurred Medical Expenses (IMEs)

Revision 09-4; Effective December 1, 2009

If IMEs are paid on a monthly basis and are anticipated to continue, the amount to be projected is an average of expenses paid in preceding months. If expenses were paid during all six of the preceding months, divide the total by 6; if there are only five months of expenses, divide the total by 5; if there are only four months of expenses, divide the total by 4; and so on.

Examples:
- The application was filed in January and is being certified in February. Beginning the preceding August, the person began paying a monthly premium of $50 on an assignable general health insurance policy. The average IME to be projected over the coming six months is $50. This is calculated as follows: $300 total paid ÷ 6 months = $50 average. A special review is scheduled for the following August.
- The application was filed in January and is being certified in February. Two months ago, in December, the person began paying a monthly premium of $60 on an assignable general health insurance policy. The average IME to be projected over the coming six months is $60. This is calculated as follows: $120 total paid ÷ 2 months = $60 average. A special review is scheduled for the following August.
Regular and fixed IMEs which are paid on a quarterly, semi-annual or annual basis are converted to a monthly average and projected for a 12-month period. If these are the person's only recurring IMEs, the case should be monitored at regular intervals (for example, every six months for quarterly and semi-annual payments) to ensure that payments continue, but reconciliation of projected expenses is not required unless the expense is not paid or the amount paid is different from the amount projected.

Examples:
- The person entered the nursing facility (NF) in January and the application is being certified in February. She pays quarterly premiums of $150 on an assignable general health insurance policy. This quarterly premium is converted to a monthly amount, and $50 ($150 quarterly premium ÷ 3 months = $50) is budgeted as a monthly IME. A special review is scheduled for the following August to ensure that payments continue. However, reconciliation will not be required in August, unless payment of premiums was discontinued or the premium amount changed.
  
  Note: Reconciliation of fixed IMEs is not required if the amount paid overall is correct, even though the schedule of payments may have been interrupted.
- The person pays a monthly premium of $50 on an assignable general health insurance policy. At the semi-annual review performed in April, the eligibility specialist verifies that in December the person made no premium payment, but made a double payment ($100) in January. Since the overall payment is still $50 per month, reconciliation is not performed for either December or January.
For fixed IMEs paid on a monthly basis, the amount to be projected is based on anticipated amounts for the coming six-month period.

Examples:
- If the person has been paying a monthly health insurance premium but says he is dropping the policy, do not project the expense in the budget. (The premium expense should be allowed through the month of the last payment.)
- The person entered the NF in January, and the case is being certified in February. She has been paying monthly premiums of $25 on an assignable general health insurance policy. However, there is verification that these premiums will increase to $35 effective April 1. The eligibility specialist budgets $25 as an IME, and schedules a special review for March to re-budget co-payment based on the new premium amount. At the special review in March, the eligibility specialist budgets an IME deduction of $35 to be effective April.
IMEs are projected for no more than six months.

Exception: If the person's only IME is a fixed amount and there is no variable income, the IME may be projected for a 12-month period. The case is monitored at regular intervals (such as every six months for monthly, quarterly and semi-annual payments) to ensure that payments continue, but reconciliation is not required unless payments were not made or the amount paid is different from the amount projected.

H-3330 Both Variable Income and Incurred Medical Expenses (IME)

Revision 09-4; Effective December 1, 2009

Variable income/IMEs to be projected for future months (not to exceed six) are based on income received/expenses paid in months preceding the month in which the application is worked.

If variable income was received during three of the preceding six months and is anticipated to reoccur, or if variable income will be received monthly, the amount to be projected for the coming six months is an average of variable income received during preceding months. (If variable income was received in all six of the preceding months, divide the total by 6; if there are only five months of variable income, divide the total by 5; if there are only four months of variable income, divide the total by 4; and so on.)

If IMEs are paid monthly and are anticipated to reoccur, or if they are in a fixed amount and are paid on a quarterly, semi-annual or annual basis, the amount to be projected for the coming six months is a monthly average of IMEs paid during preceding months.

Examples:

The application was filed in January and is being certified in February. The person receives monthly royalties from a mineral lease, which totaled $230 during the preceding six months (August through January). The person also pays a quarterly premium of $150 on an assignable general health insurance policy. There are no other IMEs.

The amount of variable income to be projected over the coming six months is $38.33. This is calculated as follows: $230 total ÷ 6 months = $38.33 average.

The amount of IMEs to be projected over the coming six months is $50. This is calculated as follows: $150 quarterly premium ÷ 3 months = $50 average.

The application was filed in January and is being certified in February. During the preceding six months, the person received the following variable income payments, each of which is anticipated to reoccur:

Month	Source #1	Source #2	Source #3
Sept.	$75
Nov.		$50
Jan.			$60

The person also pays a quarterly premium of $120 on an assignable general health insurance policy. There are no other IMEs.

The amount of variable income to be projected over the coming six months is $30.83. This is calculated as follows: $75 + $50 + $60 = $185 total ÷ 6 months = $30.83 average.

The amount of IMEs to be projected over the coming six months is $40. This is calculated as follows: $120 quarterly premium ÷ 3 months = $40 average.

A special review is scheduled for the following August to re-budget variable income and IMEs.