Program Provides Medi-Cal with Zero Share of Cost

On Jan. 1, a new Medi-Cal program will be implemented which eliminates share of cost for the disabled and the elderly who have incomes of less than or equal to $926 a month ($1,248 for couples). This new benefit policy has been named the Aged and Disabled Federal Poverty Level program and was approved by Governor Gray Davis in July during the last legislative session. This new program is expected to provide zero share of cost Medi-Cal for approximately 58,000 eligible individuals.

Aged and Disabled Federal Poverty Level is specifically designed to assist beneficiaries who have been found disabled by the Social Security Administration or the State of California's Disability and Adult Programs Division or people who receive Medi-Cal because they are 65 years or older. In addition to the requirement of being aged and disabled, only those beneficiaries who receive a specific type of Medi-Cal coverage known as Medically Needy Only are going to be eligible. Medically Needy Only Medi-Cal beneficiaries are those clients who receive Medi-Cal without a specific cash grant. The most common cash grants that provide Medi-Cal coverage are Supplemental Security Income, In-Home Supportive Services and CalWORKS. Only Medically Needy Only Medi-Cal beneficiaries are scheduled to benefit from this program because only Medically Needy Only clients are assessed a share of cost. This program is not designed to assist Supplemental Security Income recipients because they already receive Medi-Cal without a share of cost.

The largest group of HIV/AIDS recipients on Medically Needy Only Medi-Cal are those clients with Social Security Disability Insurance. Unlike Supplemental Security Income or CalWORKS, Social Security Disability Insurance does not provide zero share of cost Medi-Cal as an added perk of coverage. Instead Social Security Disability Insurance recipients must apply for Medi-Cal separately with their county's social services agency. Medically Needy Only Medi-Cal beneficiaries are also required to re-certify their eligibility every year with a Medi-Cal caseworker. Aged and Disabled Federal Poverty Level is beneficial because prior its inception Medically Needy Only Medi-Cal recipients were always assessed a share of cost if their disability incomes were in excess of $620 a month (individual). To explain, share of cost is a monthly deductible Medi-Cal recipients are required to pay towards the cost of their own health care. Before the Aged and Disabled Federal Poverty Level program share of cost for the disabled was determined by deducting $620 from a recipient's disability income. The remainder of the calculation after the deduction was the recipient's share of cost. Let's use an example to demonstrate how this calculation would figure. Let's suppose that Jane Doe, an HIV-positive client receives $820 a month in Social Security Disability Insurance earnings. Prior to this program, Jane's share-of-cost calculation would look like the equation above. Using the old system Jane would be responsible for $200 a month in health care costs. For many recipients in similar situations this system had the effect of reducing incomes to $620 a month for patients needing on-going medical care. With the new program, however, Jane would receive zero share of cost Medi-Cal because her income is below the $926 income requirement.

Eligibility standards for the Aged and Disabled Federal Poverty Level program are fairly straightforward. Qualified participants must meet the strict financial income limits and be either aged or disabled. Again, this means that Medi-Cal recipients with combined net non-exempt incomes of equal to or less than the $926 (individual) or $1,248 (couples) will be covered. What's particularly fortunate about this program is that Medi-Cal clients who have returned to work are potentially eligible for this type of aid. Qualified applicants are simply required to have incomes that do not exceed the allowable limits previously listed. If an applicant's disability income in combination with work income does not exceed these limits they will still be eligible. However, work earnings will be evaluated differently than disability income.

Disability income is evaluated dollar for dollar. In contrast, wages will be subject to the Medi-Cal return to work rules. Wages are evaluated using an "65 1/2 formula" to determine what portion of a client's earnings will be added to the net non-exempt income. The net non-exempt income is a term that simply means the client's total income from wages as well as disability earnings. This way of calculating is actually beneficial for the working disabled because it allows them to keep more of their earned income.

The formula waives the first $65 of gross earnings and then divides the remaining dollars in half. The remainder is then added to the disability income and the combined total is considered the client's net non-exempt income used to evaluate eligibility for the program. To demonstrate if a Medi-Cal recipient has an Social Security Disability Insurance income of $750 and received gross wages in the amount of $365 in a month, their calculation would look like what is shown above. In this example, the client would qualify for the Aged and Disabled Federal Poverty Level program because his or her net non-exempt income of $900 from both Social Security and wages does not exceed the $926 individual limit. Even with all of the bells and whistles of the program recipients are still required to meet the established financial and disability requirements of the Medi-Cal program. Applicants must be either 65 years of age or older or they must be considered disabled by the Social Security Administration. In addition individuals are still required to have less than $2,000 in liquid assets, $3,000 for couples and higher for families of three or more. Of course, one house of any value is allowed as long as it serves as the applicant's primary residence, one car of any value is permitted and $1,500 in burial funds is also exempt.

Some Limitations

There are some substantial limitations to this program, however. The most striking limitation is that clients who have income above what is permitted by the program are still assessed the share of costs using the old system. This means that if an individual has a disability income of $927 a month, which is just one dollar over the limit, their share of cost would be $307. There is going to be a $20 disregard built into the evaluation of eligibility for this program however so all applicants with incomes close to the listed limits should be encouraged to apply.

People who have Medi-Cal because of blindness, though, will not be eligible for this program unless they meet Social Security's definition of disability or they are at least 65 years of age. Blind applicants or beneficiaries will need to be referred to the Disability Evaluation Division of the California State Department of Social Services to be screened for possible eligibility.

In addition, recipients of long term care Medi-Cal clients are ineligible for this assistance. Some good news though is that recipients of In-Home Supportive Services (In-Home Supportive Services) will be permitted to use this program to reduce their monthly costs associated with home care assistance.

The new Aged & Disabled Federal Poverty Level Program represents a dramatic shift in Medi-Cal policy. It will make living with Medi-Cal easier for many clients. In contrast, the old way of determining share of cost was very expensive for people with HIV infection because of their dependence on long-term access to high-priced prescription medications. It effectively meant that HIV-positive persons were required to pay their share of costs every month. Now with the passage of this new policy Medi-Cal recipients will be able to have much larger incomes without such a penalty.

Rob Langelier is a Medi-Cal specialist in AIDS Project Los Angeles' Benefits Program. He can be reached by calling (323) 993-1478 or by e-mail at

This article has been reprinted at The Body with the permission of AIDS Project Los Angeles (APLA).