Revision 21-2; Effective June 1, 2021

 

A person may have to pay a monthly premium as a condition of eligibility. The premium amounts are based on a sliding scale, dependent upon the person's income. The MBI monthly premium amount is determined based on the person's unearned and earned income.

 

M-7100 Post Eligibility — Premium Budgets

Revision 21-2; Effective June 1, 2021

 

Premium Budgeting Steps

There are three steps to calculate the premium amount.

Note: While unearned income is excluded in the income eligibility budget, it is used in the calculation of the premium amount.

Step 1

Unearned Income

The unearned income premium amount is based on unearned income after allowable exemptions and exclusions.

Note: Support and maintenance income does not apply to the MBI program.

Find the unearned income premium amount by subtracting the SSI federal benefit rate amount for one person from the person's countable unearned income.

Step 2

Earned Income

Find the earned income premium amount by adding:

  • gross earned income minus mandatory payroll deductions; and
  • any countable earned self-employment income

This calculation results in the net earnings. If the net earnings are equal to or less than 150 percent of the FPL, the monthly premium is $0. If the net earnings exceed 150 percent of the FPL, the MBI person must pay a monthly premium based on the earned income. Compare the net earnings amount to the FPL ranges to find the earned income premium amount.

The 2021 FPL ranges for the earned income premium amounts are listed in the chart below. Income limits are subject to change annually.

2021 FPL Ranges Earned Income Premium Amounts
(Example Purposes Only)

Earnings at or below 150% FPL
(less than or equal to $1,610)

$0

Earnings above 150% FPL up to and including 185% FPL
(greater than $1,610 up to and including $1,986)

$20

Earnings above 185% FPL up to and including 200% FPL
(greater than $1,986 up to and including $2,147)

$25

Earnings above 200% FPL up to and including 250% FPL
(greater than 2,147 up to and including $2,684)

$30

Earnings above 250% FPL
(greater than $2,684)

$40

Step 3

Add the unearned income premium amount to the earned income premium amount to get the total monthly MBI premium amount.

 

Total Monthly Premium Limit

The total monthly premium may not exceed $500. If the unearned income premium amount plus the earned income premium amount is greater than or equal to $500, then the total monthly premium is $500.

Examples

Below are three examples for calculating the MBI premium.

Example 1

A person has $945 in unearned monthly income. After applying all deductions, the remaining earned income is $1,250.

Step 1: Subtract the SSI federal benefit rate amount for one person from the person's countable unearned income.

Description Amount

Unearned income

$945

SSI federal benefit rate

–$794

Unearned income premium amount

$151

Step 2: Compare the net earned income to the chart showing the FPL ranges to find the earned income premium amount.

Description Amount

Net monthly earnings

$1,250

Earned income premium amount

$0

Step 3: Add the unearned income premium amount to the earned income premium amount to get the total monthly MBI premium amount.

Description Amount

Unearned income premium amount

$151

Earned income premium amount

+$0

Total monthly premium

$151

Example 2

A person has $945 in monthly unearned income and $1,615 in monthly earned income, after applying all deductions.

Step 1: Subtract the SSI federal benefit rate amount from the person's countable unearned income.

Description Amount

Unearned income

$945

SSI federal benefit rate

–$794

Unearned income premium amount

$151

Step 2: Compare the net earned income to the chart showing the FPL ranges to find the earned income premium amount.

Description Amount

Net monthly earnings

$1,615

Earned income premium amount

$20

Step 3: Add the unearned income premium amount to the earned income premium amount to get the total monthly MBI premium amount.

Description Amount

Unearned income premium amount

$151

Earned income premium amount

+$20

Total monthly premium

$171

Example 3

A person has $1,295 in monthly unearned income and $1,689 in monthly earned income, after applying all deductions.

Step 1: Subtract the SSI federal benefit rate amount from the person's countable unearned income.

Description Amount

Unearned income

$1,295

SSI federal benefit rate

–$794

Unearned income premium amount

$501

Step 2: Compare the net earned income to the chart showing the FPL ranges to find the earned income premium amount.

Description Amount

Net monthly earnings

$1,689

Earned income premium amount

$20

Step 3: Add the unearned income premium amount to the earned income premium amount to get the total monthly MBI premium amount.

Description Amount

Unearned income premium amount

$501

Earned income premium amount

+$20

Total monthly premium

$500*

* The total of the unearned income premium amount plus the earned income premium amount is $521. However, the total monthly premium cannot exceed $500.

Related Policy
Budget Reference Chart, Appendix XXXI