907 KAR 20:020.
Income standards for Medicaid other than Modified Adjusted Gross Income (MAGI)
standards or for former foster care individuals.
RELATES TO: KRS 205.520, 38 U.S.C. 5503,
42 U.S.C. 1382a, 1396jj(b), 1397aa, 9902(2)
STATUTORY AUTHORITY: KRS 194A.010(1), 194A.030(2),
194A.050(1), 205.520(3), 42 C.F.R. 435, 42 U.S.C. 1396a, 1396b, 1396d, 1397aa
NECESSITY, FUNCTION, AND CONFORMITY: The
Cabinet for Health and Family Services, Department for Medicaid Services has
responsibility to administer the Medicaid Program in accordance with 42 U.S.C.
1396 through 1396v. KRS 205.520(3) authorizes the cabinet, by administrative
regulation, to comply with any requirement that may be imposed or opportunity
presented by federal law for the provisions of medical assistance to Kentucky's
indigent citizenry. This administrative regulation establishes the income
standards by which Medicaid eligibility is determined, except for individuals
for whom a modified adjusted gross income is the Medicaid eligibility income standard
or former foster care individuals who aged out of foster care while receiving
Section 1. Income Limitations. (1)(a) Income
shall be determined by comparing adjusted income as required by Section 2 of
this administrative regulation, of the applicant, applicant and spouse, or applicant,
spouse, and minor dependent children with the following scale of income protected
for basic maintenance:
Size of Family
(b) For each additional family member,
$720 annually or sixty (60) dollars monthly shall be added to the scale.
(2) For a pregnant woman or child eligible
pursuant to 42 U.S.C. 1396a(e) a change of income that occurs after the
determination of eligibility of a pregnant woman shall not affect the pregnant
woman's eligibility through the remainder of the pregnancy including the postpartum
period which ends at the end of the month containing the 60th day of a period beginning
on the last day of her pregnancy.
(3) The special income limits and
provisions established in this subsection shall apply for a determination of
eligibility of a qualified Medicare beneficiary, specified low-income Medicare
beneficiary, qualified disabled and working individual, or Medicare qualified individual
group 1 (QI-1).
(a) A qualified Medicare beneficiary
shall have income not exceeding 100 percent of the official poverty income guidelines.
(b) A specified low-income Medicare
beneficiary shall have income greater than 100 percent of the official poverty
income guidelines but not to exceed 120 percent of the official poverty income
(c) A Medicare qualified individual group
1 (QI-1) shall have income greater than 120 percent of the official poverty
income guidelines but less than or equal to 135 percent of the official poverty
(d) A qualified disabled and working
individual shall have income not exceeding 200 percent of the official poverty
(4) Income shall be limited to the
allowable amounts for the SSI program for:
(a) A child who lost eligibility for SSI
benefits due to the change in the definition of childhood disability as
established in 42 U.S.C. 1396a(a)(10); or
(b) A person with hemophilia who received
a class action settlement as established in 42 C.F.R. Part 130.
(5) Income shall be limited to the
allowable amounts for the mandatory or optional state supplement program for an
individual described in 42 C.F.R. 435.135.
(6) The following special income factors
shall apply for a Medicaid Works individual:
(a) Income for a Medicaid Works
individual’s spouse shall not exceed $45,000 per year;
(b) A Medicaid Works individual’s unearned
income shall be less than the SSI standard plus twenty (20) dollars monthly;
(c) The combination of earned and
unearned income for a Medicaid Works individual shall be less than 250 percent
of the official poverty income guidelines.
Section 2. Income Disregards. In comparing
income with the scale established in Section 1 of this administrative
regulation, gross income shall be adjusted as established in this section.
(1) In a TANF or family related Medicaid
(a) The standard work expense of an adult
member or out-of-school child shall be deducted from gross earnings;
(b) For a person with either full-time or
part-time employment, the standard work expense deduction shall be ninety (90)
dollars per month; and
(c) Earnings of an individual attending
school who is a child or parent under age nineteen (19) or a child under age
eighteen (18) who is a high school graduate shall be disregarded.
(2) For an ABD Medicaid case or a Medicaid
Works individual, the applicable federal SSI disregards pursuant to 42 U.S.C.
1382a(b) shall apply.
(3) For an individual in a Medicaid
eligibility group subject to 42 U.S.C. 1396a(a)(10)(E)(i), (ii), or (iv) or 42 U.S.C.
1396d(p), if an annual Social Security cost-of-living adjustment, Railroad
Retirement cost-of-living adjustment, or federal poverty level cost-of-living
adjustment causes an individual to be ineligible for Medicaid benefits:
(a) The individual’s most recent Social
Security cost-of-living adjustment, Railroad Retirement cost-of-living
adjustment, or federal poverty level cost-of-living adjustment shall be
(b) The disregard referenced in paragraph
(a) of this subsection shall continue until the individual loses Medicaid
eligibility for any other reason for three (3) consecutive months.
(a) An ABD Medicaid case shall be the
applicable federal SSI disregards pursuant to 42 U.S.C. 1382a(b).
(b) A Medicaid Works individual shall be
the applicable federal SSI disregards pursuant to 42 U.S.C. 1382a(b).
Section 3. Lump Sum Income. Except as
established in Section 8 of this administrative regulation, for a Medicaid
case, lump sum income shall be considered as income in the month received.
Section 4. Income Exclusions. (1) Income
of a person who is blind or disabled necessary to fulfill a plan approved by
the United States Social Security Administration to achieve self support, IRWE
deduction, or BWE deduction shall be excluded from consideration.
(2) A payment or benefit from a federal
statute, other than SSI benefits, shall be excluded from consideration as
income if precluded from consideration in SSI determinations of eligibility by
the specific terms of the statute.
(3) A cash payment intended specifically
to enable an applicant or recipient to pay for medical or social services shall
not be considered as available income in the month of receipt.
(4) A Federal Republic of Germany reparation
payment shall not be considered available in the eligibility or post
eligibility treatment of income of an individual in a nursing facility or
hospital or who is receiving home and community based services under a waiver
(5) A Social Security cost of living
adjustment on January 1 of each year shall not be considered as available
income for a qualified Medicare beneficiary, specified low-income Medicare
beneficiary, qualified disabled and working individual, or Medicare qualified
individual group 1 (QI-1) until after the month following the month in which
the official poverty income guidelines promulgated by the United States Department
of Health and Human Services are published.
(6) Any amount received from a victim’s compensation
fund established by a state to aid victims of crime shall be excluded as income.
(7) A veteran or the spouse of a veteran
residing in a nursing facility who is receiving a Veterans Administration (VA) pension
benefit shall have ninety (90) dollars:
(a) Excluded as income in the Medicaid
eligibility determination; and
(b) Excluded as income in the post
eligibility determination process.
(8) Veterans Administration payments for
unmet medical expenses and aid and attendance shall be excluded in a Medicaid
eligibility determination for a veteran or the spouse of a veteran residing in
a nursing facility.
(a) Veterans Administration payments for
unmet medical expenses and aid and attendance shall be excluded in the post
eligibility determination for a veteran or the spouse of a veteran residing in
a nonstate-operated nursing facility.
(b) Veterans Administration payments for
unmet medical expenses and aid and attendance shall not be excluded in the post
eligibility determination process for a veteran or the spouse of a veteran
residing in a state-operated nursing facility.
(9) An Austrian Social Insurance payment
based, in whole or in part, on a wage credit granted under Sections 500-506 of
the Austrian General Social Insurance Act shall be excluded from income consideration.
(10) An individual retirement account,
KEOGH plan, or other tax deferred asset shall be excluded as income until
(11) Disaster relief assistance shall be
excluded as income.
(12) Income which is exempted from
consideration for purposes of computing eligibility for the comparable money
payment program (AFDC or SSI) shall be excluded.
(13) In accordance with 42 C.F.R. 435.122
and Section 4735 of Pub.L. 105-33, a payment made from a fund established by a
settlement in the case of Susan Walker v. Bayer Corporation or payment made for
release of claims in this action shall be excluded as income.
(14) In accordance with 42 C.F.R. Part
130, any payment received by a person with hemophilia from a class action
lawsuit entitled "Factor VIII or IX Concentrate Blood Products
Litigation" shall be excluded as income.
(15) Family alternatives diversion
payments shall be excluded as income.
(16) All monies received by an individual
from the Tobacco Master Settlement Agreement shall be excluded.
(17) Income placed in a qualifying income
trust established in accordance with 42 U.S.C. 1396p(d)(4) and 907 KAR 20:030,
Section 3(5), shall be excluded.
Section 5. Consideration of Mandatory or
Optional State Supplements. For an individual receiving a mandatory or optional
state supplement, that portion of the individual's income which is in excess of
the basic maintenance standard, established in Section 1(1) of this
administrative regulation, shall be applied to the special need which results
in the supplement.
Section 6. Pass-through Cases. (1)(a) An
increase in a Social Security payment shall be disregarded in determining
eligibility for Medicaid benefits if:
1. The increase is a cost of living increase;
2. The individual would otherwise be
eligible for an SSI benefit, mandatory state supplement, or optional state
(b) An individual who would otherwise be
eligible for an SSI benefit, mandatory state supplement, or optional state supplement
shall remain eligible for the full scope of program benefits with no spend-down
requirements, as established in Section 7 of this administrative regulation.
(2) For an individual who applied by July
1, 1988, the additional amount specified in 42 U.S.C. 1383c(b) shall be
disregarded, meaning that amount of Social Security benefits to which a
specified widow or widower was entitled as a result of the recomputation of
benefits effective January 1, 1984, and except for which (and subsequent cost
of living increases) an individual would be eligible for federal SSI benefits.
Section 7. Spend-down Provisions. (1) A
technically eligible individual or family shall not be required to utilize
protected income for medical expenses before qualifying for Medicaid.
(2)(a) An individual with income in
excess of the basic maintenance scale established in Section 1(1) of this
administrative regulation shall qualify for Medicaid in any part of a three (3)
month period in which medical expenses incurred have utilized all excess income
anticipated to be in hand during that period.
(b) Medical expenses incurred in a period
prior to the quarter for which spend-down eligibility is being determined shall
be used to offset excess income if the medical expenses remain unpaid at the
beginning of the quarter and have not previously been used as spend-down expenses.
Section 8. Individual Retirement Account.
(1)(a) If an individual reaches the point where the individual is eligible to
begin withdrawing from an IRA without suffering a penalty, the individual shall
begin withdrawing from the IRA at least the minimum amount determined by the
financial institution holding the IRA.
(b) If an individual does not begin
withdrawing from an IRA pursuant to paragraph (a) of this subsection, the
individual shall be ineligible for Medicaid benefits.
(2) If an individual withdraws funds from
an IRA prior to reaching the point where the individual would suffer no penalty
for withdrawing funds, the withdrawal shall be considered non-recurring lump
(3) If an individual withdraws income
pursuant to subsection (1)(a) of this section, the income shall be prorated
over the period of time the income covers (for example monthly, quarterly, or
Section 9. Applicability. The provisions
and requirements of this administrative regulation shall:
(1) Apply to:
(a) A child in foster care;
(b) An aged, blind, or disabled
(c) An individual who receives
supplemental security income benefits; and
(2) Not apply to an individual
whose Medicaid eligibility is determined:
(a) Using the modified adjusted gross
income standard pursuant to 907 KAR 20:100; or
(b) Pursuant to 907 KAR 20:075. (21 Ky.R. 2879; Am. 22
Ky.R. 296; eff. 7-261995; 25 Ky.R. 444; 865; eff. 9-16-1998; 26 Ky.R. 1255;
1573; eff. 2-1-2000; 28 Ky.R. 965; eff. 12-19-2001. 30 Ky.R. 1117; 1533; eff.
1-2-2004; 34 Ky.R. 1849; 2122; eff. 4-4-2008; Recodified from 907 KAR 1:640, 9-30-2013; 40 Ky.R. 1164; 1768;
2157; eff. 4-4-2014.)