Revision 15-3; Effective September 1, 2015
If a person or couple is already eligible for Medicaid and enters an institutional setting, or after a person or couple in an institutional setting is determined eligible for MEPD, the Texas Health and Human Services Commission (HHSC) calculates the person's or couple's co-payment.
Ideally, the total countable income for the co-payment budget would be the same as the total countable income for the eligibility budget. Payments not considered as income in the eligibility and co-payment budgets are addressed in Section E-1700, Things That Are Not Income, and Section E-2000, Exempt Income. However, the total countable income for the co-payment budget may be different from the total countable income for the eligibility budget. When dealing with wages, normally earnings (including deductions) are considered in the eligibility budget. Mandatory payroll deductions are not considered when determining the co-payment budget. When determining the co-payment, consider the following:
- Section E-1760, Wage-Related Payments
- Section E-1770, Mandatory Payroll Deductions
- Section E-3110, Wages
HHSC nets the person's and spouse's earned income each month by subtracting the following mandatory payroll deductions:
- Income tax
- Social Security tax
- Required retirement withholdings
- Required uniform expenses
Due to automation limitations and requirements, special treatment for the co-payment occurs when the person:
- receives certain Department of Veterans Affairs (VA) benefits, or
- does not have vendor payment coverage due to a transfer penalty or a substantial home equity disqualification.
People whose VA benefits are capped at $90 per month keep the full $90 as a personal needs allowance (PNA).
The law (United States Code [U.S.C.], Title 38, Part IV, Chapter 55, §5503) provides that the VA pension amount for an institutionalized Medicaid recipient with neither a spouse nor child (or in the case of a surviving spouse, no child) cannot exceed $90 per month. Do not use the $90 VA pension in determining what a person in an institutional setting must pay to the facility toward the cost of care. Do not count the limited VA pension, up to the amount of $90, as income in the eligibility or co-payment budget. There is no interaction between the reduced pension and the PNA. If the veteran has income from other sources, the income from other sources may be considered countable for co-payment purposes. HHSC performs the co-payment calculations to determine the amount of the veteran’s liability toward the cost of care.
Because of automation limitations, the VA $90 capped pension will be included in the PNA calculation.
- For a non-SSI Medicaid recipient in an institutional living arrangement who does not have a VA pension capped at $90 per month, the total PNA will be up to the current maximum of $60.
- For a non-SSI Medicaid recipient in an institutional setting who has a VA pension capped at $90 per month, the total PNA may be up to $150 ($90 VA plus up to $60 PNA).
- State supplementation is not allowed for a Medicaid recipient who is not an SSI recipient.
- The VA $90 capped pension and PNA calculation does not impact the protected earned income allowance.
If the veteran does not have another source of income from which to deduct the $60 PNA, the PNA will continue to be $90 and the co-payment will be zero. In a situation in which the veteran’s other source of income is less than $60, the PNA will be $90 plus the amount of other income, not to exceed $60. There is no state supplement to bring the PNA up to $60 if the veteran does not have other income from which to subtract the PNA. The PNA deduction comes first in the order of all co-payment deductions, including those for incurred medical expenses (IMEs).
Note: See Section E-4300, VA Benefits, for treatment of payments from the Department of Veterans Affairs. See Section E-4311.2, $90 VA Pension and Institutional Setting, regarding automation limitations and the VA $90 capped pension.
If the person is eligible for Medicaid but has a transfer of assets penalty or a substantial home equity disqualification, follow Appendix XXIII, Procedure for Designated Vendor Number to Withhold Vendor Payment. For policy information on transfer penalties and substantial home equity disqualifications, see the following:
- Chapter I, Transfer of Assets
- Section F-3600, Substantial Home Equity
- Section F-3610, Persons Impacted by Substantial Home Equity Disqualification
- Section F-3620, Persons Not Impacted by Substantial Home Equity Disqualification
- Section F-3630, When the Equity Value is Greater Than the Limit
- Section F-3640, Reverse Mortgage or Home Equity Loan
- Section F-3650, Documentation
- Section F-3660, Undue Hardship
To determine the co-payment for a person or couple, use the following budget steps.
Step 1. Determine the person's monthly net earned and gross unearned income.
- VA aid and attendance benefits, housebound allowances, and reimbursements for unusual or continuing medical expenses are exempt from both eligibility and co-payment. However, if these payments are deposited into a qualifying income trust (QIT) account, they are countable for co-payment.
- Do not consider child support as a deduction from an individual’s co-pay if it is withheld from unearned income because of garnishment. See Section E-1400, Garnishment or Seizure.
Step 2. Add net earned and gross unearned income.
Subtract the personal needs allowance of $60 from available income for an individual budget. Subtract the guardian fee allowance, if applicable. Subtract the Medicare Part B premium, if applicable. Subtract incurred medical expenses. Subtract the home maintenance allowance, if applicable. The remainder is the co-payment.
Subtract the personal needs allowance of $120 from the combined available income for a couple budget. Subtract the guardian fee allowance, if applicable. Subtract the Medicare Part B premium, if applicable. Subtract incurred medical expenses. Subtract the home maintenance allowance, if applicable. Divide the remainder by 2 to determine the co-payment for each spouse.