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3800.00.00 TRANSITIONAL MEDICAL ASSISTANCE HISTORY AND OVERVIEW

The Transitional Medical Assistance (TMA) program began when Medicaid for low-income families was tied to AFDC (Aid to Families with Dependent Children, colloquially known as “welfare”) cash assistance. TMA required a four-month extension of Medicaid coverage when AFDC families experienced an increase in countable income from child support, spousal support, or new or increased wages. The Family Support Act of 1988 expanded the program by allowing low-income families whose income increased specifically due to employment or self- employment to maintain their Medicaid assistance for up to twelve months under certain conditions.

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 replaced AFDC with Temporary Aid to Needy Families (TANF) and delinked Medicaid from cash assistance, but TMA still uses TANF eligibility rules for household composition. The four-month TMA extension is not currently used as child and spousal support is not countable in a MAGI budget per IRS rules (as of 2018) and any increase will not affect the Medicaid budget. The expanded 6-to-12-month TMA provisions previously required annual reauthorization by Congress but were made permanent in the Medicare and Chip Reauthorization Act (MACRA) of 2015.

The income test for Medicaid for Low-Income Parent Caretakers is called the MAGI-converted need standard. These levels are based on a snapshot of TANF standards as of PRWORA passage, and unlike the FPL they do not increase every year. When a family has been under this limit and then earned income increases, they may qualify for TMA.

Caretaker/Dependent Household Size 1 2 3 4 5 6 7 8 Indiana MAGI- Converted Need Standard $152 $247 $310 $373 $435 $498 $561 $561

Historically, Indiana has used separate non-MAGI budgeting for families in the TMA program. Continued TMA eligibility and budgeting was based on reports that families had to complete and turn in every three months along with actual documentation of family income and expenses for each of three months included on the current report.

3800.05.00 CHANGES DUE TO HEALTHY INDIANA PLAN WAIVER RENEWAL

Effective August 2018, Indiana will operate its TMA program using modified eligibility rules approved in an amendment to the Healthy Indiana Plan (HIP) 1115 Waiver.

TMA will continue to exist to ease low-income families’ transition into a new employment status and/or earnings level by protecting their Medicaid from closing solely due to the income increase for up to 12 months.