Vol. 27, No. 3
Legal Services News
Health Care for Low-Income Coloradans
by Peter Komlos-Hrobsky
Medicare, Medicaid, and the Colorado Resident Discount program are currently the principal sources of health care for low-income Coloradans. In general, Medicare is tied to Social Security, while Medicaid is tied to "need-based" poverty programs, such as the Supplemental Security Income ("SSI") program. The Colorado Resident Discount program is a free-standing state program that provides services to low-income persons who do not qualify for Medicare or Medicaid. The Child Health Insurance Program ("CHIP") is a new program for low-income children who do not qualify for Medicaid or other insurance. Colorado's CHIP is expected to begin providing services later this year. This article presents an overview of these programs, their eligibility criteria, and the services they cover.
Medicare and Social Security
Medicare is a federally administered health insurance program for recipients of Social Security and Railroad Retirement benefits, as well as for federal employees who retire after 1983. Medicare is divided into Parts A and B. Part A covers hospital costs and is provided without charge to qualifying Social Security or other recipients. Part B covers doctors' charges and other services and is available for a premium, currently $43.80 per month.1
Medicare coverage is broad, with three serious limitations: (1) high co-payments and deductibles; (2) no coverage of out-patient medications; and (3) limited nursing home coverage.2 In recent years, some HMOs have been offering medication coverage to patients who agree to receive their Medicare services through that HMO.
Social Security recipients represent the largest group of Medicare users. Social Security is a federally administered "quasi-insurance" program for workers who retire or are disabled, and their survivors and dependents.3 However, the Social Security Act does not extend Medicare to many Social Security recipients. Most recipients of dependents' and survivors' benefits do not qualify. Workers with a sufficient earnings record can opt to retire and receive Social Security benefits as early as age 62. Early retirement does not entitle recipients to Medicare until they reach age 65, thus leaving a three-year gap between Social Security and Medicare eligibility. Moreover, most Social Security disability beneficiaries must wait two years before Medicare begins.4
Medicaid and Public Benefits
Medicaid provides, subject to many exceptions, health benefits to persons receiving "need-based" public benefits.5 Medicaid is funded with a combination of state and federal funds. Colorado's Medicaid program is administered by the Colorado Department of Health Care Policy and Financing and the Colorado Department of Human Services, which in turn contract with county social services departments and other agencies. Medicaid recipients must use available Medicare and private insurance coverage before using Medicaid.6
Unlike Medicare, Medicaid covers long-term care and medications, and is subject to only small co-payments. Services not currently provided to adults include: hearing aids, glasses, dental work, and non-surgically implanted prosthetics. A provision of the Medicaid laws called the Early Periodic Screening and Diagnosis and Treatment Program requires broader coverage for children.7
The following is a summary of the principal state and federal public benefits programs and their relationship to Medicaid.
Medicaid and Families' and Childrens' Programs
Until recently, Aid to Families with Dependent Children ("AFDC") paid a small monthly benefit to low-income, limited- resource families. In 1997, federal legislation replaced AFDC with Temporary Assistance to Needy Families ("TANF"). These changes have been implemented in Colorado by the "Colorado Works" program, which provides up to five years of cash assistance to poor families who are participating in a vocational program.8
TANF families are eligible for Medicaid.9 Persons who do not qualify for TANF, but meet the old July 16, 1996, AFDC eligibility criteria, also continue to qualify for Medicaid.10 Finally, a program called "Baby Care/Kids Care" provides Medicaid to indigent children and pregnant mothers who do not qualify for Medicaid either through TANF or by meeting the old AFDC criteria.11
Medicaid, SSI, and the "1619b" Program
SSI is a need-based program for retirees and disabled persons.12 Recipients must be low-income and have less than $2,000 ($3,000 for a couple) in non-excluded resources, the principal exclusions being a home and a car.13
To qualify for SSI on the basis of disability, a disabled individual must earn less than $500 per month. Once an individual qualifies for SSI, the $500 limit is dropped, and the only limit on allowable income is the SSI benefit amount calculation. Specifically, the SSI benefit is calculated as the difference between countable income and a "standard of need,"14 currently set at $494 a month. To determine countable income, the recipient's unearned income is reduced by a $20 "disregard," and any earned income is reduced by deducting whatever is left of the $20 unearned income disregard, plus another $65, and by dividing the remainder in half.15
For example, a disabled person with no resources, $100 a month in Social Security benefits (unearned income), and another $75 a month in wages (earned income) would be considered to have $100 - $20 = $80 in countable unearned income, and ($75 - $65) ÷ 2 = $5 in countable earned income. The total countable income would be $85, and the monthly SSI benefit would be $494 - $85 = $409.
Receipt of any amount of SSI qualifies the recipient for Medicaid.16 SSI recipients whose earnings are too high to receive SSI, but who still cannot afford needed medical care, are often able to retain Medicaid eligibility through a provision in the Social Security Act referred to as the "1619b" program.17
The QMB and SLMB Programs
Social Security recipients whose income is slightly too high to qualify for SSI may be entitled to Qualified Medicare Beneficiaries ("QMB") or Special Low Income Medicare Beneficiary ("SLMB") benefits.18 These programs use Medicaid funds to pay Medicare co-payments and deductibles, but do not entitle the recipient to services not covered by Medicare.
Medicaid Coverage of Long-Term Care
The Colorado Medicaid program raises the income limit for persons in need of extended hospital or long-term care to three times the SSI limit (currently, $1,482 per month), provided the other SSI financial criteria are met. This is referred to as the "300 percent" program. Long-term care includes nursing home care and services provided by any of Colorado's Home and Community Based Services programs.19 These are programs that provide home- and community-based alternatives to institutionalization for the elderly, blind, disabled, and other groups.
Eligibility for Medicaid coverage of long-term care has become a significant part of elder law practice. Considerations include: (1) establishing trusts to qualify persons whose income is more than the 300 percent limit, but less than private pay rates; (2) the "spousal protection" laws that establish the share of an institutionalized person's income and resources that can be set aside for the non-institutionalized spouse; (3) "transfer penalties" that limit the circumstances in which resources can be given away without disqualifying the donor from Medicaid long-term care coverage; and (4) "Medicaid liens" that the state can place on the home of institutionalized persons to recoup Medicaid costs on the patient's death.20
Medicaid for "Pickle People"
The "Pickle" Amendment continues or reinstates Medicaid for persons who once were eligible for both Social Security and SSI, and who would still have SSI "but for" Social Security cost-of-living increases.21 This group includes some persons who received SSI disability while their Social Security benefit level was being calculated, and then lost SSI when the Social Security disability benefit turned out to be higher than the SSI income limit.
Medicaid for "Disabled Adult Children"
Disabled Adult Children ("DACs") are persons whose disability began before age 22, and whose parent has retired, become disabled, or died. Being a DAC has two consequences. First, the DAC is often entitled to a Social Security benefit based on their parent's earnings record.22 Second, a DAC who loses SSI disability benefits because the Social Security benefits on his or her parent's record exceed the SSI limit is entitled to continuing Medicaid.23
Medicaid and PASS Plans
Plans for Achieving Self-Support ("PASS") allows disabled persons, usually Social Security disability recipients, to set aside some of their income or resources for a vocational objective such as tuition or business equipment.24 If a PASS is approved by the Social Security Administration, the income or resources set aside will not be counted in calculating SSI eligibility. In many cases, this allows the recipient to qualify for SSI and Medicaid.
Old Age Pension and Home Care Allowance Programs
Recipients of the Colorado Old Age Pension ("OAP") qualify for Medicaid.25 This includes persons whose income would be more than the OAP limit but for the addition of a Home Care Allowance ("HCA") allotment.
The Colorado Resident Discount Program
Coloradans who do not qualify for Medicare or Medicaid may qualify for the Colorado Indigent Care program, also known as the Colorado Resident Discount program and the Medically Indigent program.26 This program is funded solely with state funds and provides services on a sliding scale depending on the patient's resources and income. Every county in the state has one or more hospital or local clinic designated to provide Colorado Indigent Care services.
The Child Health Insurance Program ("CHIP")
In the fall of 1997, Congress amended the Social Security Act to provide $60 billion in federal matching funds over a ten-year period for state CHIPs.27 The purpose of CHIPs is to provide health care to uninsured children whose income levels are low, but not low enough to qualify them for Medicaid. Colorado is the first state to apply for CHIP funding, and hopes to begin the new program later this year.
Lack of health care is often the most crucial problem facing low-income families and workers. Finding services requires wading into a "serbonian bog"28 of state and federal laws. However, it is also one of the most valuable services that advocates can provide to low-income clients.
1. 42 U.S.C. § 1395 et seq.; 42 C.F.R. §§ 406, 407.
2. 42 U.S.C. §§ 1395d(a)(2), 1395e.
3. The Social Security program appears in Title II of the Social Security Act and benefits are often referred to as "Title II" benefits. 42 U.S.C. § 401 et seq.; 20 C.F.R. § 401 et seq.
4. 42 U.S.C. § 426.
5. 42 U.S.C. § 1396 et seq.; 42 C.F.R. § 430 et seq.
6. 10 C.C.R. 2505-10, §§ 8.061.01-.03.
7. 42 U.S.C. § 1396d(a)(4)(B).
8. See Olson, "The State's Approach to Welfare Reform: 'Colorado Works,'" 27 The Colorado Lawyer 37 (Jan. 1998).
9. 10 C.C.R. 2505-10, § 8.100.52B.
10. 10 C.C.R. 2505-10, § 8.101.1.
12. SSI appears as Title XVI of the Social Security Act and benefits are often referred to as "Title XVI" benefits. 42 U.S.C. § 1381 et seq.; 20 C.F.R. § 416 et seq.
13. 20 C.F.R. § 416.1210.
14. 20 C.F.R. § 416.405.
15. 20 C.F.R. § 416.1100 et seq.
16. 42 U.S.C. § 1396a(a)(10)(A).
17. Sheldon, Jr., "Work Incentives for Persons with Disabilities Under the Social Security and SSI Programs," 28 Clearinghouse Rev. 236 (July 1994).
18. 42 U.S.C. § 1396d(p).
19. 10 C.C.R. 2505-10, §§ 8.100.52 and 8.100.62. Currently, most home- and community-based services recipients must have limited resources. But see exceptions in 10 C.C.R. 2505-10, § 8.112.
20. 10 C.C.R. 2505-10, §§ 8.063 et seq., 8.110.52, 8.110.54 et seq., and 8.112.23 et seq.
21. 42 U.S.C. § 1396a; see also Bonnyman, "Medicaid Eligibility in a Time Warp," 22 Clearinghouse Rev. 120 (June 1988).
22. 42 U.S.C. § 402(d).
23. 10 C.C.R. 2505-10, § 8.100.52I.
24. 42 U.S.C. § 1382a(b)(4)(A)(iii); see also Sheldon, Jr. and Lopez-Soto, "PASS: Supplemental Security Income's Plan for Achieving Self Support," 31 Clearinghouse Rev. 1101 (March-April 1997).
25. 10 C.C.R. 2505-10, §§ 8.100.52D and 8.100.62B. and C.
26. CRS § 26-15-101 et seq.
27. The new provisions appear as Title XXI of the Social Security Act, Pub.L. 105-33 (1997).
28. Feld v. Berger, 424 F.Supp. 1356, 1357 (S.D.N.Y. 1976), referring to the federal Medicaid regulations. Medicaid has also been called "almost unintelligible to the uninitiated," Friedman v. Berger, 547 F.2d 724, 727, n.7 (2d Cir. 1976), cert. den., 430 U.S. 984 (1977), and "an aggravated assault on the English language," Friedman v. Berger, 409 F.Supp. 1225, 1226 (S.D.N.Y. 1976).
Legal Services News is published bimonthly to apprise members of the bar of legal services projects, issues, and pro bono opportunities. Readers are encouraged to submit articles and topic ideas for this department to Department Editor Eric B. Liebman, an associate at Reiman & Bayaz, P.C., 1600 Broadway, #1340, Denver, CO 80202, (303) 860-1500.
Peter S. Komlos-Hrobsky, Denver, is an attorney with the Legal Aid Society of Metropolitan Denver, (303) 866-9391.
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