28.03 MAGI-Based Medicaid

Definition: Tax dependent. For purposes of MAGI-based Medicaid, the term “tax dependent” has the same meaning as the term “dependent” under § 152 of the Code, and also includes an individual for whom another individual claims a deduction for a personal exemption under § 151 of the Code for the benefit year.4 Basic rule.5 Except as specified in paragraphs (h), (i), and (j) of this subsection, financial eligibility for MAGI- based Medicaid is determined based on household income, as defined in paragraph (c) of this subsection. Household composition is determined separately for each individual; see paragraph (e) of this subsection for details on household composition. Household income6 General rule. Except as provided in paragraphs (c)(2) through (c)(4) of this subsection, household income for MAGI-based Medicaid is the sum of the MAGI-based income, as defined in paragraph (d) of this subsection, of every person included in the individual’s household, as defined in paragraph (e) of this subsection. Income of children and tax dependents (i) The MAGI-based income of a person who is included in the household of their natural, adopted, or step-parent, and is not expected to be required to file a federal tax return7 for the benefit year in which eligibility for Medicaid is being determined, is not included in household income whether or not such person files a federal tax return. (ii) The MAGI-based income of a tax dependent described in paragraph (e)(3)(i) of this subsection (individual other than a spouse or child who expects to be claimed as a tax dependent by another tax filer) who is not expected to be required to file a federal tax return8 for the benefit year in which eligibility for Medicaid is being determined, is not included in the household income of the tax filer whether or not such tax dependent files a federal tax return. Available cash support not included. In the case of an individual described in paragraph (e)(3)(i) of this subsection (individual other than a spouse or child who expects to be claimed as a tax dependent by another tax filer), household income does not include cash support provided by the person claiming such individual as a tax dependent. Five-percent disregard. Effective January 1, 2014, in determining the eligibility of an individual for 4 42 CFR § 435.4 5 42 CFR § 435.603(c). 6 42 CFR § 435.603(d). 7 As required under section 6012(a)(1) of the Code. 8 Id. Medicaid under the eligibility group with the highest income standard under which the individual may be determined eligible using MAGI-based methodologies, an amount equivalent to 5 percentage points of the FPL for the applicable family size is deducted from household income. Sponsored noncitizens (i) In determining the financial eligibility of a noncitizen who is admitted to the United States on or after August 22, 1996, based on a sponsorship under § 204 of the INA, the income of the sponsor and the sponsor’s spouse, if living with the sponsor, must be counted as available to the noncitizen when all four of the conditions set forth in (A) through (D) below are met. The responsibility of a sponsor continues until the noncitizen is naturalized or credited with 40 qualifying quarters of coverage by the SSA (as described in (ii) below). Children and pregnant women who are exempt from the five-year bar pursuant to § 17.03(c)(6) are not subject to these provisions. The four conditions are as follows: The sponsor has signed an affidavit of support on a form developed by the United States Attorney General as required by PRWORA to conform to the requirements of § 213A(b) of INA; The noncitizen is lawfully admitted for permanent residence, and a five-year period of ineligibility for Medicaid following entry to the United States has ended; The noncitizen is not battered; and The noncitizen is not indigent, defined as unable to obtain food and shelter without assistance, because his or her sponsor is not providing adequate support. (ii) Qualifying quarters of coverage. A noncitizen is credited with the following qualifying quarters of coverage (as defined under Title II of the Act); (I) All of the qualifying quarters of coverage worked by the noncitizen; (II) All of the qualifying quarters of coverage worked by a parent of such noncitizen while the noncitizen was under age 18; and (III) All of the qualifying quarters of coverage worked by a spouse of such noncitizen during their marriage as long as the noncitizen remains married to such spouse or such spouse is deceased. No qualifying quarter of coverage for any period beginning after December 31, 1996 may be credited to a noncitizen under (II) or (III) above if the parent or spouse, as the case may be, of such noncitizen received any federal means-tested public benefit during the period for which the qualifying quarter of coverage is credited. Federal means-tested benefits for this purpose do not include: (I) Emergency medical assistance; (II) Short-term, non-cash, in-kind emergency disaster relief; (III) Assistance under the National School Lunch Act or the Child Nutrition Act of 1966: (IV) Public health assistance for immunizations or testing and treatment of symptoms of communicable diseases not paid by Medicaid; (V) Payments for foster care and adoption assistance under parts B and E of Title IV of the Act, under certain conditions; (VI) Programs, services or assistance specified by the Attorney General; (VII) Programs of student assistance under Titles IV, V, IX and X of the Higher Education Act of 1965, and Titles III, VII and VIII of the PHS Act; (VIII) Means-tested programs under the Elementary and Secondary Education Act of 1965; (IX) Benefits under the Head Start Act; or (X) Benefits under the Job Training Partnership Act. MAGI-based income.9 For the purposes of this subsection, MAGI-based income means income calculated using the same financial methodologies used to determine MAGI, with the following exceptions: An amount received as a lump sum is counted as income only in the month received unless otherwise required by federal law with respect to qualified lottery and gambling winnings of $80,000 or greater.10 Scholarships, awards, or fellowship grants used for education purposes and not for living expenses are excluded from income. American Indian/Alaska Native exceptions. The following are excluded from income: (i) Distributions from Alaska Native Corporations and Settlement Trusts; (ii) Distributions from any property held in trust, subject to federal restrictions, located within the most recent boundaries of a prior federal reservation, or otherwise under the supervision of the Secretary of the Interior; (iii) Distributions and payments from rents, leases, rights of way, royalties, usage rights, or natural resource extraction and harvest from: Rights of ownership or possession in any lands described in paragraph (d)(3)(ii) of this subsection; or Federally protected rights regarding off-reservation hunting, fishing, gathering, or usage of natural resources; (iv) Distributions resulting from real property ownership interests related to natural resources and improvements: Located on or near a reservation or within the most recent boundaries of a prior federal reservation; or 9 42 CFR § 435.603(e). 10 Bipartisan Budget Act of 2018, section 53103; CMS SHO Letter No. 19-003 (August 22, 2019). Resulting from the exercise of federally-protected rights relating to such real property ownership interests; (v) Payments resulting from ownership interests in or usage rights to items that have unique religious, spiritual, traditional, or cultural significance or rights that support subsistence or a traditional lifestyle according to applicable tribal law or custom; (vi) Student financial assistance provided under the Bureau of Indian Affairs education programs. Household In general. For purposes of household composition: (i) “Child” includes a natural or biological, adopted or step-child. (ii) “Parent” includes a natural or biological, adopted or step-parent. (iii) “Sibling” includes a natural or biological, adopted or step-sibling. Basic rule for tax filers not claimed as a tax dependent. In the case of an individual who expects to file a federal tax return for the benefit year in which an initial determination or renewal of eligibility is being made, and who does not expect to be claimed as a tax dependent by another tax filer, the household consists of the tax filer and, subject to paragraph (e)(6) of this subsection, all persons whom such individual expects to claim as a tax dependent. Basic rule for individuals claimed as a tax dependent. In the case of an individual who expects to be claimed as a tax dependent by another tax filer for the benefit year in which an initial determination or renewal of eligibility is being made, the household is the household of the tax filer claiming such individual as a tax dependent, except that the household must be determined in accordance with paragraph (e)(4) of this subsection in the case of: (i) Individuals who expect to be claimed as a tax dependent by a tax filer who is not the individual’s spouse or parent; (ii) Individuals under the age specified under paragraph (e)(4)(iv) of this subsection who expect to be claimed by one parent as a tax dependent and are living with both parents but whose parents do not expect to file a joint federal tax return; and (iii) Individuals under the age specified under paragraph (e)(4)(iv) of this subsection who expect to be claimed as a tax dependent by a non-custodial parent. For purposes of this paragraph: The custodial parent is the parent so named in a court order or binding separation, divorce, or custody agreement establishing physical custody; or If there is no such order or agreement, or in the event of a shared custody agreement, the custodial parent is the parent with whom the child spends most nights. Rules for individuals who neither file a tax return nor are claimed as a tax dependent. In the case of an individual who does not expect to file a federal tax return and does not expect to be claimed as a tax dependent for the benefit year in which an initial determination or renewal of eligibility is being made, or who is described in paragraph (e)(3)(i), (e)(3)(ii), or (e)(3)(iii) of this subsection, the household consists of the individual and, if living with the individual: (i) The individual’s spouse; (ii) The individual’s children under the age specified in (iv) of this paragraph (e)(4); and (iii) In the case of an individual under the age specified in (iv) of this paragraph (e)(4), the individual’s parents and siblings under the age specified in (iv) of this paragraph (e)(4). (iv) The age specified in this paragraph (e)(4) is age 19 or, in the case of a full-time student, age 21. Couples. In the case of a couple living together, each spouse is included in the household of the other spouse, regardless of whether they expect to file a joint federal tax return11 or whether one spouse expects to be claimed as a tax dependent by the other spouse. Households of individuals whom tax filer cannot establish as a dependent. For purposes of paragraph (e)(2) of this subsection, if, consistent with the procedures adopted by the state in accordance with § 56.00, a tax filer cannot reasonably establish that another person is a tax dependent of the tax filer for the benefit year in which Medicaid is sought, the inclusion of such person in the household of the tax filer is determined in accordance with paragraph (e)(4) of this subsection. No resource test or income disregards.12 In the case of an individual whose financial eligibility for Medicaid is determined in accordance with this subsection, AHS will not: Apply any resources test; or Apply any income or expense disregards under §§ 1902(r)(2) or 1931(b)(2)(C), or otherwise under Title XIX of the Act, except as provided in paragraph (c)(4) of this subsection. Budget period13 Applicants and new enrollees. Financial eligibility for Medicaid for applicants, and other individuals not receiving Medicaid benefits at the point at which eligibility for Medicaid is being determined, must be based on current monthly household income and family size. Current beneficiaries. For an individual who has been determined financially eligible for Medicaid using the MAGI-based methods set forth in this section, AHS will base financial eligibility on current monthly household income and family size. Alternative methodology to avoid eligibility gap.14 If an individual who meets the non-financial eligibility 11 See, § 6013 of the Code. 12 42 CFR § 435.603(g). 13 42 CFR § 435.603(h). 14 42 CFR § 435.603(i). requirements for Medicaid is determined to be financially ineligible for Medicaid using the MAGI-based Medicaid methodologies set forth in this subsection, but their household income is determined to be less than 100 percent of the FPL using the MAGI methodologies for determining eligibility for APTC and CSR, as set forth in § 28.05, the individual’s eligibility for Medicaid will be determined using the MAGI methodologies set forth in § 28.05. Eligibility groups for which MAGI-based methods do not apply.15 The financial methodologies described in this subsection are not applied in determining the Medicaid eligibility of individuals described in this paragraph. Except for the individuals described in (1) of this paragraph (i), the financial methods described in § 29.00 (MABD financial eligibility standards) will be used to determine Medicaid eligibility for such individuals. Individuals whose eligibility for Medicaid does not require a determination of income, including, but not limited to, individuals receiving SSI eligible for Medicaid under § 8.05(a) and individuals deemed to be receiving SSI and eligible for Medicaid under § § 8.05(c), (f) and (h). Individuals who are age 65 or older when age is a condition of eligibility. Individuals whose eligibility is being determined on the basis of being blind or disabled, or on the basis of being treated as being blind or disabled, including, but not limited to, individuals under § 8.05(k)(6)(Katie Beckett) and individuals receiving state supplements, but only for the purpose of determining eligibility on such basis. Individuals who request that the financial methods described in § 29.00 be used to determine their eligibility for Medicaid coverage of long-term care services and supports. Individuals who are being evaluated for eligibility for the Medicare savings programs under § 8.07, but only for purposes of determining eligibility for such programs. Special rule: family planning services.16 In the case of an individual whose eligibility is being determined under § 9.03(g) (family planning services), AHS will: Count only the MAGI-based income of the individual for purposes of paragraph (c) of this subsection; and Increase the family size of the individual, as defined in § 28.02, by one.