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Editor’s note: A version of this story first appeared on the Vail Daily website on Feb. 11, 2018.
A Boulder attorney is worried some Eagle County residents are being denied Medicaid benefits and possibly Advanced Premium Tax Credits (APTC) to offset health insurance costs under Obamacare because the county is incorrectly determining income eligibility.
“This is the second year in a row I’ve dealt with this issue for a client, and I’m concerned that there may be more community members who don’t realize they are being denied eligibility,” said Boulder attorney Sean Owens. “[County officials] have not been taking into account deductions to income – for example, retirement contributions – when determining eligibility for benefits.”
After first contacting Eagle County on behalf of a local client last year, the problem was fixed and his client became eligible for Medicaid benefits. He was told at the time that the overall problem was being addressed and would not happen again. Then it happened again this year.
“It can be a situation where someone is making borderline where they would qualify for Medicaid, and if they put a thousand dollars into a retirement account, they would qualify, and they might not even be aware that they can still save for retirement and qualify for Medicaid,” Owens said.
For instance, someone making $20,000 a year can contribute $3,000 to an Individual Retirement Account (IRA) and get their Modified Adjusted Gross Income (MAGI) under the eligibility cutoff level for Medicaid, which last year was just under $17,000 a year for individuals.
Owens says Eagle County officials were not allowing for retirement contributions.
Megan Burch, interim director of Eagle County’s Department of Human Services, agrees that retirement contributions should have been taken into consideration when calculating Medicaid eligibility for Owens’ client last year.
Burch says IRA contributions are listed as an allowable deduction from gross income for the purposes of determining Medicaid eligibility as outlined in the Code of Colorado Regulations. She added her department had to contact the state for clarification on how to appropriately enter the deduction into the state database, called the Colorado Benefits Management System (CBMS).
In the future, Burch says steps have been taken to make sure it doesn’t happen again.
“Training was then provided to all staff members tasked with entering these details into CBMS for Medicaid applications to ensure these situations are handled appropriately,” Burch said in an email. “We have an internal quality assurance review process that will also be reviewing cases to ensure eligibility was properly determined. Additionally, cases are randomly pulled by the state audit team as another layer of quality assurance.”
Owens hopes those steps end the issue for his client and anyone else who may have been denied eligibility either for Medicaid or Obamacare tax credits – most of whom he says would not have thought to contact an attorney to sort out the problem.
He’s also worried that 401(k) and other types of pre-tax contributions may not be calculated properly because, according to a fact sheet from the Colorado Department of Health Care Policy and Financing, “child care expenses, flexible spending accounts, employer sponsored health insurance and contributions to 401(k)” are not allowed as deductions.
“Technically this is correct — each of those listed items are not deductions — but they do modify MAGI for Medicaid purposes because they are often pretax contributions that directly modify AGI,” Owens said. “If these pre-tax contributions aren’t being handled correctly, that could be a problem.”