Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. Using the 300 Percent of SSI Standard and Providing an Adequate Personal Maintenance Allowance


States have the option to use more liberal income-eligibility criteria for the waiver program--up to 300 percent of the Federal SSI payment--$2,022 per month in 2010. (This option is discussed in detail in Chapter 2.)

This option is attractive for HCBS waiver programs that cover services in residential care settings, because it expands the program to include beneficiaries who are better able to afford room and board costs. To make this option effective, however, states must allow eligible persons to retain enough of their income to cover “maintenance needs,” including the room and board charges in residential care settings. Setting a higher maintenance allowance may allow more beneficiaries to be served in residential care settings; however, it will increase Medicaid’s service payment since it reduces the “excess income” that is applied to the cost of services.

Under Medicaid’s post-eligibility treatment of income rules for HCBS waivers, states are allowed to use “reasonable standards” to establish the maintenance allowance, and may vary the allowance based on the beneficiary’s circumstances. For example, states can permit Medicaid beneficiaries to keep sufficient income to pay for the needs of a dependent, health care costs not covered by Medicaid, and other necessary expenses.

States typically set a single maintenance needs allowance for all HCBS waiver participants. Many states set their maintenance needs allowance at 300 percent of the SSI Federal benefit. Since 300 percent of the SSI Federal benefit is the highest amount of income a person can have and still be subject to share of cost requirements, setting the maintenance needs allowance at that level allows waiver participants to keep all of their income to pay for living expenses. It also eliminates the administrative burden for states to calculate cost-sharing requirements.

If a state does not want to set a single maintenance needs allowance, Medicaid rules allow states to set different maintenance allowances for each individual, or for groups of individuals, if they believe that different amounts are justified by the needs of the individuals or groups.

Beneficiaries living in residential care settings may have different income needs depending on the type of facility: private market-rate facility or subsidized housing facility. The rent component of the monthly fee charged by facilities built with low-income housing tax credits will be lower than the rent charged by privately financed facilities. Through tax credits, rents can be reduced to around $400 per month. A lower maintenance amount for individuals with rent subsidies means more income is available to share the cost of services.

Setting the maintenance allowance based on the area’s average monthly charge for room and board may be overly generous when applied to residents in subsidized units. On the other hand, setting the maintenance allowance based on the amount paid by residents in subsidized units may be too low for private market facilities and create access barriers. If a state wants to improve access to both private and subsidized residential care facilities, it can set a separate maintenance allowance for each setting.

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