You asked us to review a letter and related documents from a constituent that address the constituent's eligibility for several Department of Social Services (DSS) programs, including Medicaid.

We have no way of verifying the information in the letter, nor do we feel it appropriate to answer questions seeking either our opinion or improved customer service at the department. We have tried to cull from the documents policy questions, which we address individually.

1. Why would a monthly Food Stamp benefit drop from $ 104 to $ 10? Does the state or federal government run this program?

The detailed eligibility letter from DSS, dated August 8, 2007, seems to indicate that the reason the constituent's Food Stamp benefit dropped to $ 10 was because the amount of her rent, mortgage, utility bills, or other shelter costs had changed. Unfortunately, neither DSS' nor the constituent's letters explain this in more detail.

In general, eligibility workers take certain deductions when determining (1) whether someone qualifies and (2) the benefit amount. When making these determinations, the state worker compares an applicant's net income with the program's income limit. To derive net income, the worker takes several deductions, including one for excess shelter costs. The worker compares half of the applicant's adjusted income to the shelter costs (which include rent, utilities, etc. ). Generally, any excess amount is deducted from income on top of the other deductions.

DSS has indicated that the constituent's shelter costs were $ 525 in August but dropped to $ 0 in September, thus rendering her ineligible for more than the minimum $ 10 Food Stamp benefit.

The constituent's letter implies that her son is living with her. If she is sharing her housing expenses with him, this could affect how much she can deduct as the state will count only what she pays for shelter costs. It is possible that the paperwork necessary to prove certain shelter expenses has not been provided. For example, a letter from the landlord or a cancelled rent check could be used, as could a utility bill. Applicants must provide this to DSS.

The U. S. Department of Agriculture (USDA) runs the Food Stamp program but states administer it. It is funded almost exclusively with federal appropriations and federal law governs program eligibility rules. Using these rules, DSS determines eligibility at the state level and distributes electronic benefit cards to recipients, which clients use when purchasing food.

2. Why does a legal settlement (in this instance from a car accident) affect eligibility for DSS assistance?

Although the law (CGS § 17b-93, et. seq. ) gives the state a claim against any property that a public assistance beneficiary (cash or medical assistance) acquires, it is applied in a more limited way when a living person applying for or receiving Medicaid wins a lawsuit.

In general, when someone receives a windfall, such as a lawsuit settlement, the state's claim is a lien against the proceeds for the amount of public assistance provided, or 50% of the proceeds of the lawsuit, whichever is less. The claim has priority over all other claims except attorney's fees, lawsuit expenses, and related hospitalization costs and other medical costs (above and beyond insurance payments).

In the case of a Medicaid recipient, according to DSS's Bob Augeri, the state will make claims only for Medicaid that was provided for medical services needed in connection with the lawsuit. So if a long-time Medicaid recipient was involved in a car accident and sued, the state would claim from any settlement only those Medicaid expenses connected to the lawsuit. For other Medicaid costs, the state generally waits until the recipient dies and attempts to recover the remainder from the estate. (In general, the state recovers from the estate of someone of any age who received Medicaid-funded nursing home services, and from someone who was age 55 or older and receiving Medicaid-funded services in the community. )

If a public assistance recipient gets a lump sum payment (in this instance, a settlement payment), it is considered income during the six-month eligibility period for Medicaid that includes the month when the lump sum was received. Any part of the lump sum remaining after this period is considered an asset (DSS Uniform Policy Manual, §4030. 45). So an individual might lose his or her eligibility when this occurs.

Federal law requires state Medicaid programs to count the lump sum payments towards eligibility.

3. Why are the reasons for Medicaid eligibility denials not clearly spelled out by DSS?

The form letter DSS sent to the constituent indicates that she is over income for Medicaid eligibility by about $ 200 per month. (This spend-down amount is derived by comparing her monthly Social Security disability benefit ($ 942), with the Medicaid income limit (about $ 715 per month)). In order to qualify for benefits, the constituent must provide DSS with documentation (e. g. , medical bills) that she has excess medical expenses totaling at least $ 1,333. 68.

The letter did not go into how DSS calculated eligibility. According to the constituent's caseworker, DSS' central office generates the letter.

4. Who pays the constituent's monthly Medicare premiums, the state or federal government? What is the current monthly Part B premium?

Although she appears to be ineligible for full Medicaid coverage for the current six-month period, the DSS letter indicates that the constituent still qualifies for the Qualified Medicare Beneficiary (QMB) program. This is one of several Medicaid-funded Medicare Savings programs and generally pays (1) the monthly Medicare Part B premiums and annual deductible and (2) co-insurance and deductibles for services covered under Part A. Since this is a Medicaid program, the state pays and the federal government reimburses it for half of its expenditures.

Table 1 shows some of the Medicare premiums and deductibles for 2007.

Table 1: Select Cost Sharing in Medicare (2007)

[1] Only 1% of Medicare recipients pay these premiums. These are people who do not have enough qualifying quarters (they do not qualify for Social Security or Railroad Retirement benefits) but essentially are allowed to buy-into Medicare.

None of the above or the 20% coinsurance (Medicare pays 80% of the service cost) are the responsibility of the QMB beneficiary.

5. Why can't the state allow someone whose income is over the medically needy income limit and whose medical expenses are not sufficient to help him or her reach that limit continue to receive Medicaid? If someone has more-than-sufficient medical expenses to meet a spend-down, can he or she use the excess for the next six-month budget period?

As we indicated above, federal regulations specify the income limit, which includes deductions for unearned income and other items. The state would jeopardize its federal match if it were to cover individuals with net income exceeding these limits.

The regulations provide that allowable medical expenses are carried over from one budget period to the next when an individual qualifies for Medicaid during that period and has a spend-down liability that can be met without deducting all these expenses (42 CFR §436. 831). For example, if someone had a $ 1,000 spend-down for an eligibility period running from June 1^st to December 1^st and had $ 1,500 in excess medical expenses, he or she could apply the extra $ 500 towards the following budget period's spend-down obligation. Another regulation requires “209 b” states (Connecticut is one of several states with this designation, which essentially means that the state has more restrictive eligibility criteria for its Medicaid medically needy program) to deduct incurred expenses regardless of when they are incurred (42 CFR § 435. 831). (According to DSS' Augeri, the agency uses the latter regulation. ) We believe this may be the “overage” to which your constituent was referring.

RC: ro