The coronavirus relief bill includes a direct payment to most Americans, but this has Medicaid recipients wondering how the payment will affect them. Because the payment is not income, it should not count against a Medicaid recipient’s eligibility.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a one-time direct payment of $1,200 to individuals earning less than $75,000 per year ($150,000 for couples who file jointly), including Social Security beneficiaries. Individuals earning up to $99,000 ($198,000 for joint filers) will receive smaller checks. Payments are based on either 2018 or 2019 tax returns. The IRS has issued guidance, stating that anyone who did not file a 2018 tax return would need to file a simple tax return in order to receive the payment. However, after receiving complaints that the requirement to file a tax return would be burdensome on seniors, the IRS announced that it would automatically send Social Security beneficiaries their economic impact payment check without them having to file a tax return. Social Security beneficiaries who receive direct deposit will get their checks directly in their bank accounts. The IRS will mail other beneficiaries a check, which may take longer than the direct deposit.
The basic Medicaid rule for nursing home residents is that they must pay all of their income, minus certain deductions, to the nursing home. If the economic impact payment were considered income, it would likely have to go straight to the nursing home. There was also a concern that since Medicaid recipients can only have limited resources, the payment may put them over the resource limit and make them ineligible for benefits.
In a blog post, the commissioner of the Social Security Administration (SSA) has clarified that the SSA will not consider payments as income for Supplemental Security Insurance (SSI) recipients, and the payments will be excluded from resources for 12 months. Because state Medicaid programs cannot impose eligibility requirements that are stricter than SSI requirements, the payments should not affect Medicaid eligibility.
On April 17, 2020, the Department of Human Services issued guidance on how the economic impact payments would affect Medicaid recipients.
Q: How will receipt of the economic impact payment affect participant resources? Will participants be over the resource limit?
A: The portion of the economic impact payments that are spent within 12 months of receipt are considered an excluded resource for MA eligibility. Any portion of the payment that is not spent within 12 months of receipt is a countable resource.
Q: Do these payments need to be reported as income for the month they’re received? Will they count as income in the month they’re received?
A: The payment must be reported to the CAO, but it will be considered excluded income for MA eligibility.
Q: Does the economic impact payment need to be included in the resident liability (patient pay) for the month?
A: No. The payment will not be counted to determine the patient pay.
Updated April 28, 2020