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Families and Children Manual Section: Financial Eligibility Policy Manual Number: 010.005 Chapter: Overview of Financial Eligibility

OVERVIEW OF FINANCIAL ELIGIBILITY

1. Overview

The Affordable Care Act (ACA) requires that financial eligibility for certain TennCare Medicaid categories and CoverKids be determined using the Modified Adjusted Gross Income (MAGI) methodology. Implementation of the MAGI methodology eliminates former references to AFDC/TANF policies and procedures for the applicable MAGI categories. The MAGI methodology is based on federal tax rules for determining adjusted gross income.

In general, the MAGI methodology is defined by the following characteristics:

a. Financial eligibility is based on current monthly household income and Eligibility Determination Group (EDG) size; b. Taxable income is countable income; c. Non-taxable income is excluded income; d. There is no asset or resource test; e. There is a 5% disregard applied to income calculations when the disregard matters for determinations of eligibility; and f. EDG size is determined by the principles of tax dependency.

2. Purpose

The ACA amended federal laws so that one eligibility determination methodology is used across all Insurance Affordability Programs: Medicaid, Children’s Health Insurance Programs (CHIP), referred to as CoverKids in Tennessee, and the Advance Premium Tax Credits (APTC) offered through the state and federal Exchanges. Minor differences exist between the Medicaid/CHIP and the APTC MAGI methodologies, but in general, the methodologies yield similar outcomes when determining financial eligibility.

3. Federally-Required MAGI Eligibility Categories

The ACA requires that the MAGI methodology, as written in federal regulations, be applied to the following categories:

a. Child MAGI 0-1; b. Child MAGI 1-5; c. Child MAGI 6-18; d. Caretaker Relative MAGI; e. Presumptive Pregnancy; f. Pregnancy MAGI; g. Extended Medicaid; h. Transitional Medicaid; i. Hospital Presumptive Eligibility (HPE); March 18, 2019 Division of TennCare 1