CHILDREN’S HEALTH INSURANCE PROGRAM CHIP

Case Example Parent, Mary, receiving lump sum settlement of $300,000 She earns $2,000 per month as clerk (200% of FPL = $2,452) Mary has one child, not disabled Child has health insurance through state Medicaid agency CHIP program After an injury, clients need help with numerous issues, including health insurance, available benefits to help pay the bills and provide needed services You need to know your client’s thoughts about importance of maintaining benefit eligibility versus retaining control over the funds They need to understand the structured settlement as an option You may be able to get benefits in place prior to settlement that maximizes the value of the settlement to the client

Will Mary’s settlement affect child’s CHIP health insurance? Does your state have an asset limit for CHIP? If Mary structures her settlement will that put her income over the CHIP income limit? Does CHIP require 12 month reporting or immediate reporting of change of circumstances? With lead time, we were able to get the client qualified for Medicaid quickly by setting up a special needs trust immediately and transferring existing assets into trust. We got the client on the Medicaid waiver program, so any allocation to his wife for her loss of consortium claim did not affect his eligibility We allocated a larger amount than we might otherwise have to the consortium claim, and the wife agreed to pace the funds in an irrevocable trust which provided that if she divorced or left the client, she would be entitled to a fixed sum with the remainder to stay in the trust for the benefit of client and the children.

What if the child receives the lump sum What if the child receives the lump sum? Is there an asset limit for household members or just parents? What if child’s settlement is structured? Is CHIP based on parent’s income only or also child’s income?

CHIP and Subrogation Issues If child on CHIP is injured, what subrogation rules apply? Does your state CHIP program a Medicaid program or does Medicaid just pay the premiums for private health insurance

MEDICARE SAVINGS PLANS (MSP) LOW INCOME SUBSIDY (LIS or Extra Help)

Qualified Medicare Beneficiary Income below 100% of FPL - $908 Non-exempt assets below $6,680 Home and vehicle of any value exempt QMB benefit: pays Medicare Part A, B and D premiums, Medicare co-pays and deductibles, automatically enrolled in Part D LIS

Specified Low-Income Beneficiary Income below 120% of FPL - $1,178 Non-exempt assets below $6,680 Home and vehicle of any value exempt SLMB benefit: pays Medicare Part B premium, automatically enrolled in Part D LIS

Qualified Individual - QI Income below 135% of FPL - $1,226 Non-exempt assets below $6,680 Home and vehicle of any value exempt QI benefit: pays Medicare Part B premiums, Medicare co-pays and deductibles, automatically enrolled in Part D LIS

Extra Help – Low Income Subsidy Medicare, not Medicaid program Pays all or part of Part D premiums for prescription drug coverage Pays all or part of prescription drug co-pays

Extra Help Eligibility Full subsidy: QMB, SLMB, QI deemed eligible Income below 135% of FPL Assets below $6,680 single $10,020 couple

Extra Help Eligibility Partial subsidy: Income between 135% and 150% of FPL Assets below $11,140 single $22,260 couple

Case Example Mrs. Lee is 69, LPR for 10 years Did not pay into Social Security Has Medicare Part A, B and D Income of $700/month from a foreign pension She will be getting a $50,000 personal injury settlement There is information in the handout which addresses eligibility for SSDI, CDB and DAC SSDI is available 5 months after the person is disabled. Children disabled prior to age 22 get DAC or CDB benefits when a parent retires, dies or becomes disabled Medicare kicks in 24 months after SSDI begins. This is why COBRA benefits have an extension period for persons who are disabled – ensure that your client files the necessary notices to get this extension if they want/need the COBRA benefits until Medicare is available Shorter waiting period end stage renal disease, one month for Amyotropic Lateral Sclerosis (Lou Gehrig’s disease)

QMB QMB is paying Mrs. Lee’s Medicare premiums, co-pays and deductibles Part A premium $450/mo Part B premium $96.40/mo Part A deductible $1,132/yr Part B deductible $162/yr Part D premium $50/mo Donut hole medications $4,500/yr Part A & B co-pays $4,000/yr

Cost to lose QMB for 1 year Part A premiums $5,400 Part B premiums $1,156 Part D premiums $600 Part A & B deductibles $1,294 Part A& B co-pays $4,000 Part D co-pays in donut $4,500 Total $16,950

Options to preserve MSP/LIS Asset limit $6,680 + car + house Pooled SNT if allowed in your state for person over 64 Give away settlement/no transfer penalty Purchase exempt assets (home/car) Spend down and re-apply