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COMBINED MEDICAID 601-1 Prospective Budgeting Supersedes: MA 601-1 (01/01/09); FMA 601-1 (01/01/09) Reference: 42 CFR 435.601; ARM 37.82.101, .703, .903; 20 CFR 416 Subpart K Overview: ACA: Income eligibility for all ACA programs and HMK is determined using MAGI (Modified Adjusted Gross Income). Income eligibility is based on current monthly income and household size. NOTE: When tax returns are not provided, ACA follows Family Medically Needy prospective budgeting policy. Financial eligibility will be prospectively budgeted. Best estimates of income, household composition and other circumstances for the benefit month will be used to determine eligibility. All Medicaid Programs: Financial eligibility is determined prospectively using the best estimates of income, household composition, resources (for programs with a resource limit) and other circumstances. Prospective budgeting methods can be used on both earned and unearned income. However, there are some income types and situations that require specific methods be used. For example, actual income must be used when determining retro eligibility and self-employment income is always annualized. MAGI HOUSEHOLD: Tax filing rules are used to determine countable income. In addition to counting taxable income, MAGI requires that other specific income be included in the countable income determination. These include: 1. All Social Security RSDI (but not SSI). 2. Foreign earned income 3. Tax-exempt interest GATHERING INFORMATION: Certain information must be gathered to correctly determine a client’s eligibility. Eligibility staff should use information provided verbally by the client, on the application, at renewal, reported changes and/or collateral verification to make a correct eligibility determination. 1. When determining income eligibility, the following information may be needed: a. income source/job type;