Family Health Plus Budgeting Methodology

August 19, 2010

Author: Geoffrey Hale| Cathy Roberts

Maria is a 42-year-old single mother living with her 6-year-old child. Maria comes to us for help to enroll in a public health program.  She is uninsured and has an income of $1850 a month.  Given her income level, she is likely ineligible for Medicaid, but Maria may be eligible for Family Health Plus (FHPlus).

Depending on how Maria’s income is calculated, the budgeting methodology for determining eligibility for FHPlus has changed over the years, leading to some confusion which this article aims to clarify.

What is Family Health Plus?

Established under a Medicaid waiver in 2001, Family Health Plus (FHPlus) is a Medicaid expansion program for uninsured adults who are over-income for regular Medicaid. 1  The program was implemented via a New York State Department of Health Administrative Directive in 2001, but there is still no regulatory guidance. 2  Some of the rules governing eligibility have changed over the years, and earlier understandings of income eligibility rules may no longer apply.  For the most accurate explication of current rules, advocates should rely on the Medicaid Reference Guide, available on-line at: http://www.nyhealth.gov/health_care/medicaid/reference/mrg/.

Currently, eligible applicants/recipients must be:

• Residents of New York state, who are either citizens or meet certain immigration requirements;
• between the ages of 19 and 64;
• uninsured;
• ineligible for Medicaid solely due to excess income and/or resources; and
• must meet certain income requirements depending on which category the applicant falls into:
• adults with a dependent child under the age of 21 living at home can earn up to 150% of the Federal Poverty Level (FPL)
• 19 or 20-year-old without children living at home can earn up to 150% FPL, and
• A 21-year-old adult without a child living at home may earn up to 100% FPL.

As of January 1, 2010, there is no longer any resource test for FHPlus.

How is Income Calculated to Determine Eligibility for FHPlus?

As with regular Medicaid, the applicant must have income below a specified standard.  In Maria’s case, she can have as much as $1,822 a month and still qualify for FHPlus.  The determination of income eligibility, however, is not based strictly on gross income.  Just like regular Medicaid, you must first apply the appropriate budgeting methodology to determine the appropriate value of the applicant’s gross income.  

Regular Medicaid uses five different budgeting methodologies to determine income eligibility – Low Income Families; ADC-related; SSI-related; Single/Childless Couples; and Chronic Care budgeting.  Different people are subject to different budgeting rules when applying for regular Medicaid depending on their characteristics.  Since people often fall into more than one category, more than one budgeting methodology may apply.  Eligibility for Medicaid need only be found under one budgeting methodology. Whatever methodology applies, its application in each instance is similar.  Budgeting simply involves the subtraction of certain specified kinds of income from the applicant’s gross income and then compares it to the appropriate standard.  Each budgeting methodology has a list of specific kinds of income to be subtracted from gross income (“disregards”).

But FHPlus is different from regular Medicaid in that the budgeting methodology, for the most part, is specific to the program, not the applicant.  All FHPlus applicants must follow the FHPlus budgeting rules, no matter what methodology was used to evaluate their possible Medicaid eligibility. 

Original Budgeting Methodology Under FHPlus

When the program was first implemented in 2001, determining FHPlus eligibility required applying one of two existing Medicaid budgeting methodologies:  either the ADC-related budgeting methodology or the Single/Childless Couple(S/CC) budgeting methodology.  Both of these budgeting methodologies included useful disregards, but are no longer available.  

In the past, your client worked to earn her income, she would have received a 28% Earned Income disregard as well as a $90 Work Expense disregard.  She would also have been able to disregard food stamps benefits, assistance based on need, and $50 for support payments such as child support.

Unfortunately, under the current budgeting methodology, these disregards are no longer available.

FHPlus Current Budgeting Methodology

By 2007, FHPlus had its own budgeting methodology.  Many significant disregards available under ADC-related budgeting or S/CC budgeting rules no longer apply.  For example, there is no longer a disregard for a percentage of earned income and no longer a $90 Work Expense Disregard.  There is also no longer a disregard for food stamps, assistance based on need, or for support payments.   Available disregards under FHPlus include such things as Child Care benefits under Americorps VISTA, Cash Assistance income, SSI payments, and payments made to Vietnam Veterans. 

A complete list of all available disregards is available in the “Income” section of the Medicaid Reference Guide, pp. 224.1 – 224.1b, available at:  http://www.nyhealth.gov/health_care/medicaid/reference/mrg/income.pdf.  There is also a useful side-by-side comparison of all disregards available under the all Medicaid budgeting methodologies is included in the “Reference” section of the Medicaid Reference Guide, pp. 530.1 – 530.5, available at:  http://www.nyhealth.gov/health_care/medicaid/reference/mrg/. 

There are also three disregards under FHPlus that are only available to parents living with children under the age of 21 and persons aged 19 and 20.  These include Disaster Relief and Emergency Assistance; Insurance Payments; and Radiation Exposure Compensation Trust Fund payments.

Is Our Client Currently Eligible for FHPlus?

The short answer is: ”no”...Maria’s income of $1,850 is above the FHPlus standard of $1,822 per month, and none of the disregards currently available under the program’s budgeting methodology are available to her.  In this particular client’s case, she receives $1300 a month in Social Security Disability Insurance benefits plus $550 in child support from her daughter’s father.  Ironically, had the State Department of Health retained the ADC-related and S/CC budgeting methodologies used when FHPlus was first implemented, the $50 a month disregard for Support Payments would have brought her income below the FHPlus standard. 

Instead, unless she can afford to pay hundreds of dollars every month for private insurance, she will remain uninsured for the remaining two years until she becomes eligible for Medicare.  For a person with a disability, this will indeed be a hardship.

How Will Federal Health Reform Change the Situation?

The Patient Protection and Affordable Care Act (PPACA) includes significant changes that will affect New York State’s Family Health Plus program.  PPACA changes Medicaid budgeting rules for most applicants and recipients, replacing the complex categorical budgeting methodologies with a standard 5% deduction.  That alone would have helped our client.  The standard deduction would bring her income down to $1757.50, well below the current $1822 FHPlus income level standard – but still not below the 133% FPL that will be required for regular Medicaid. 3 PPACA also mandates expansion of  Medicaid coverage to 133% FPL by 2014.  This will provide new coverage to childless adults currently over-income for both Medicaid and FHPlus, up to the new 133% FPL level.  Parents with incomes up to 133% FPL may be shifted from FHPlus to the state’s regular Medicaid program – depending on the federal reimbursement that is available.  Those between 133% and 150% FPL, however, will still depend on FHPlus.

The new federal legislation also grants states the option of establishing basic health programs to cover those with incomes between 134% and 200% FPL.  Unlike regular Medicaid, these plans may have limited premiums, and different cost-sharing levels.  New York State is likely to explore the possibility of replacing FHPlus with a basic health plan as contemplated by PPACA, especially since New York has already requested a federal waiver to expand FHPlus to 200% of the FPL. 4  Advocates will need to be watching closely to ensure that low-income New Yorkers don’t lose services in the transition, which will require close monitoring of the state’s approach to designing a basic health plan.

This is the first in a series of articles on Medicaid budgeting issues.  For additional information contact Geoffrey Hale, ghale@empirejustice.org.

Footnotes

1.  Eligibility rules for FHPlus are codified at 18 N.Y.C.R.R. § 369-ee(2)(a).  OMM/ADM-6), available at: 
2.  01 OMM/ADM-6, available at:  http://www.health.state.ny.us/health_care/medicaid/publications/docs/adm/01adm-6.pdf.
3.  For a full discussion of upcoming changes under federal health reform, see Trildy de Jung and Lisa Sbrana’s article, “Medicaid Expansion in Federal Health Care Reform – ‘The Gift of the MAGI,’” in the current issue of the LSJ.
4.  PPACA § 1331(a)(1), (e).