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540 (07/2026) Chapter 2:Eligibility • Section 10: Long-Term Care (LTC) services expenses to be deducted for purposes of the liability calculation (not eligibility), using one of the following methods: Allowable deductions: • A cost or portion of a cost that has already been paid must be reported within 10 days of the date the cost was paid. When reported timely, the deduction is allowed and is used in the month the cost or portion of a cost is paid. • A one-time cost that has been incurred but not yet paid is allowed in the month the individual reports they will pay the expense. • One-time medical expenses that have been incurred, not yet paid in full, and that will be paid over more than one month are allowed as follows:
The amount allowed as a deduction is the amount the individual expects to pay each month until the outstanding balance would be paid in full (cannot be more than the total amount due when the expense is reported).
If the cost is allowed, but the individual doesn’t actually pay it, no more deductions are allowed for that cost. In other words, we will never allow more than the total amount due when the cost is reported.
The deduction begins the month the individual reports they will begin making payments. If a payment has already been paid, as long as it was reported within 10 days of the payment, that payment is allowed as a deduction in the month it was paid. • Deductions for one-time medical expenses that have been paid by credit card are allowed as follows:
The amount allowed as a deduction is the amount the individual expects to pay or is already paying each month until the outstanding balance of the medical cost would be paid in full. » For new costs with no payment history, use the amount the individual expects to pay each month. Verify the medical cost, amount paid by credit card, and count the entirety of each payment toward the principal balance. » For balances on a credit card that are from previous allowable medical costs that have not been used in the past and were not billed during a disqualification period, verify the date the original medical bill was paid to the provider, the amount paid with the credit card and all payments made to the credit card since to determine the outstanding balance. Assume each payment to the credit card goes entirely to the principal balance.
When allowable medical costs are charged to a credit card along with non-allowable or non-medical costs, assume all payments to the card go toward paying the allowable medical costs first.
The deduction must be updated when the individual reports they will be changing the payment amount or has made subsequent charges to a credit card for allowable medical costs.
If the cost is allowed, but the individual doesn’t actually pay it, no more deductions are allowed for that cost. In other words, we will never allow more than the total amount due when the cost is reported. • Recurring costs, such as those for ongoing prescription medications, can be anticipated and allowed through the next annual redetermination. So, if the initial month of eligibility was July, and a recurring cost was reported and verified in September, it can be used in September–June, when the annual redetermination is due.