Determining Monthly Medical Expenses

A. A household that contains a member who is eligible for a medical expense deduction is eligible for a deduction using either the Standard Medical Expense Deduction (SMED) or using actual medical expenses. Beginning October 1, 2016, the SMED is one hundred sixty-five dollars

($165). The SMED is used if the total verified medical expenses are greater than thirty-five dollars ($35) and less than or equal to the SMED. The household may claim actual expenses if the total verified expenses, after deducting the first thirty-five dollars ($35), exceed the SMED. At ... Then allow ... And verify ... Application, if the household has medical The SMED, The household has medical expenses expenses greater than $35 and less than greater than $35.verification must be or equal to the SMED, received to allow the SMED. Application, if the household has monthly Actual medical expenses, The actual monthly medical medical expenses greater than the SMED expense(s). If the household chooses after subtracting the first $35, not to provide verification of expenses exceeding the SMED, then allow the SMED instead of actual expenses. Verification of expenses exceeding $35 must be received to allow the SMED. Recertification, if: The SMED, No verification is required unless the • The household already has actual household’s declaration is medical expenses greater than $35 questionable. and less than or equal to the SMED, and • There is no change, or there is a change in the amount but the monthly medical expense is still greater than $35 and is less than or equal to the SMED, Recertification, if the household does not The SMED, The household has medical expenses already have the SMED allowed and the greater than $35. Verification must be household states an eligible member has received to allow the SMED. medical expenses greater than $35 and less than or equal to the SMED, Recertification, if the household does not Actual medical expenses, The actual monthly medical already have actual medical expenses expense(s). If the household chooses budgeted and the household states an not to provide verification of expenses eligible member has medical expenses exceeding the SMED, then allow the greater than the SMED after subtracting SMED instead of actual expenses. The the first $35, household must provide proof of expenses exceeding $35 to receive the SMED. Recertification, if: • The SMED if the new The change in medical expenses. total is greater than• The household has actual medical $35 and less than or expenses greater than the SMED equal to the SMED, or already allowed, and • There is a change in the monthly • Actual medical expenses if the new amount of more than twenty-five total exceeds the dollars ($25), SMED after deducting the first $35 B. Expenses incurred weekly or biweekly shall be converted to a monthly amount using exact dollars and cents and the conversion method outlined in Section 4.402, A. The excess over thirty-five dollars ($35) per month is allowed as a monthly deduction. C. At the time of application and recertification, the household may elect to have one-time-only costs deducted in one month as a lump sum or averaged over the certification period to obtain a monthly amount. If the household elects to average the expenses over the certification period, the thirty-five dollar ($35) deduction shall be taken for each month of the certification period. When a one-time-only medical expense is reported during a certification period, the amount may be deducted in a lump sum or averaged over the remainder of the certification period. Averaging would begin the month the change would be effective. If the household elects to average the expenses over the remainder of the certification period, the thirty-five dollar ($35) deduction shall be taken for each remaining month of the certification period. When averaging the medical expenses, the SMED is allowed for each month of the certification period, as long as the household’s allowable averaged monthly medical expense is greater than $35. If the expense recurs monthly or more often, and the medical expense exceeds $35 and is less than or equal to the SMED each month, the SMED is allowed for each month of the certification period. When allowable medical expenses for the household exceed the SMED after deducting the first $35, the actual medical expenses are budgeted. The following chart is used to determine when to allow the SMED or actual medical expenses. If the expense ... THEN ALLOW THE ... Recurs less often than monthly and the amount Actual amount of verified actual medical expense averaged for each month is less than or equal to in the month billed, or use the SMED in the month $35, billed if the medical expense is greater than $35 and less than or equal to the SMED. Recurs less often than monthly and the amount SMED for each month of the certification period. averaged for each month is greater than $35 and less than or equal to the SMED each month, Recurs less often than monthly and the amount Averaged amount of actual verified medical averaged for each month is greater than the expenses for each month. Allow the SMED only if SMED, the household chooses to use the SMED or fails to provide enough verification to qualify for actual medical expenses. Occurs one time and the amount averaged over Actual amount of verified medical expenses in the the certification period is less than or equal to month billed, or use the SMED in the month billed if $35 a month, the medical expense is greater than $35 and is less than or equal to the SMED. Occurs one time and the amount averaged over SMED for each month of the certification period. the certification period is greater than $35 and less than or equal to the SMED each month, Occurs one time and the amount averaged over Averaged amount of the actual medical expenses the certification period is greater than the SMED for each month. Allow the SMED only if the each month, household chooses to use the SMED or fails to provide enough verification to qualify for actual medical expenses.