RD260 - Reduction of the 300% of SSI (Supplemental Security Income) Income Limit - October 2012

Executive Summary:
Item #307 KKK of the 2012 Appropriations Act directs the Department of Medical Assistance Services (DMAS) to take two actions related to the Medicaid eligibility group for institutionalized individuals, the 300 percent of the Supplemental Security Income (SSI) group:

"1. The Department of Medical Assistance Services shall amend the State Plan for Medical Assistance to reduce the income limit for eligibility under the 300 percent Supplemental Security Income (SSI) eligibility group to 267 percent of the SSI payment level. The department shall implement this change effective January 1, 2014, or the earliest date thereafter when it is determined that such change is in compliance with the maintenance of effort requirements of § 2001 of the federal Patient Protection and Affordable Care Act (P.L. 111-148).

2. Prior to the implementation of the reduction in paragraph KKK 1., the Director of the Department of Medical Assistance Services shall provide a detailed report and analysis of the impact of the reduction of income eligibility from 300 percent to 267 percent of Supplemental Security Income (SSI) on current Medicaid members. The report shall include a comprehensive review and analysis of the estimated savings, costs and effects of the eligibility change."

This document is intended to meet the requirements specified in Item 307 KKK.2.

Discussed in more detail below, the Department has examined the implications of the reduction in the income limit for the SSI group and determined that the savings previously estimated are not realistic given various factors related to eligibility for Medicaid in Virginia. These factors are primarily related to continued eligibility for nursing facility coverage under Medically Needy coverage rules despite the income threshold reduction in the SSI group, refilling of vacated waiver slots under the Intellectual Disabilities (ill) and Family Developmental Disabilities Support (DD) waivers with individuals on the waiting lists, substitution of the Elderly or Disabled with Consumer Direction (EDCD) waiver services for individuals vacating ill and DD waivers due to excess income, and required phasing of the reduction over the fiscal year.

The Department estimates that some savings will still be achieved through the income threshold reduction, but the level of savings is estimated at $4 million ($2 million GF) in FY 2014. Previously, the Department estimated this Appropriations Act provision would save $24.5 million ($12.3 million GF). This estimate and implications of the income threshold reduction are discussed below.