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Chapter: 1800 Income Program: MSSI, SFP 33 1840.1007 Medical Insurance Payments (MSSI, SFP) Medical insurance payments made directly to an individual are income unless:

1. restrictions make them unavailable for food, clothing, and shelter; 2. restricted to the purchase or reimbursement of medical services covered by the policy; 3. payments are made directly to the hospital or nursing facility by the health insurance company; or 4. payments are from Medicaid benefits paid under the Consumer Directed Care Project.

1840.1007.01 Long Term Insurance (LTC) payments Cash received in conjunction with medical services may or may not be considered as income. There are many types of insurance available, and each policy is reviewed to determine whether or not payments received should be included in the Medicaid eligibility and patient responsibility budgets.

1. Flat Rate Payments: Cash from an insurance policy which pays a flat rate benefit to the client without any regard for actual per diem charges or expenses incurred is considered income. If the insurance policy pays an individual a fixed amount daily regardless of the actual daily facility charges, it is considered a flat rate payment and included as income. The payments from a flat rate policy are not restricted for payment of medical expenses as a set amount is paid even if it exceeds the actual charges. Payments from a flat rate LTC insurance policy paid to a provider is countable income to an individual, as the payments continue to be made without regard to the charges or expenses the individual is incurring. 2. Reimbursements: Cash received to reimburse an individual for actual medical expenses incurred is not considered income, even if the individual choose to receive the payment directly instead of assigning it to a provider. Refer to section 1840.1100 for further information on reimbursements.

For further information regarding third party payments, refer to Chapter 3200. 1840.1009 Annuities and Other Retirement Funds (MSSI, SFP) Refer to Chapter 1600 for retirement fund policy and for transfers to retirement funds. Refer to passage 1840.1003 for how to consider interest earned on retirement funds. 1840.1010 Home Equity Plans (MSSI, SFP) Individuals may convert the value of their home into cash through a variety of loan types. If the plan creates a debt against the home, equity is reduced.

Home Equity Conversion (HEC) Plans are designed to allow homeowners to convert the value of their homes into cash without being forced to leave their homes. Under these plans, the home is either mortgaged or sold to a financial institution (or an individual) in exchange for a regular cash payment or line of credit which, the homeowner receives as long as he lives in the home. Following is a list of possible HEC arrangements: reverse mortgages, sale-leaseback, time sale and deferred payment loans.

Individuals can also access the value of their home through a home equity loan or home equity line of credit. A home equity line of credit only reduces equity if the credit is accessed and payments are received.

Generally, the proceeds from all of the above arrangements are considered loans and are not considered as income to the individual in the month of receipt. If the proceeds are retained into the following month, they must be evaluated as an asset. Refer to loan policy in 1640.0560.01.