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Issue Alert - 08-10-02

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Oct 07, 2008

Program Area:


Issue Summary:

Pension benefits that cover an individual’s Part B premium are counted as income – not excluded as a reimbursement – when determining Medicaid eligibility.

Persons Affected:

Medicaid recipients and applicants.

For More Information:

Center for Civil Justice 320 S. Washington, 2nd Floor Saginaw, MI 48607 (989) 755-3120, (800)724-7441 Fax: (989) 755-3558 E-mail:

Michigan Poverty Law Program 611 Church Street, Suite 4A Ann Arbor, MI 48104-3000 (734) 998-6100 (734) 998-9125 Fax


Under the Department of Human Services (DHS) policy in Program Eligibility Manual (PEM)_ Item 500, money received as a reimbursement is not counted as income if it

o          is for a specifically identified expense(s) and is NOT for normal household living expenses such as rent, mortgage, personal clothing and food eaten at home.

o          is used for its intended purpose.

o           is made or documented separately from other payments.

The DHS PEM is available online at

What's Happening?

Beginning October 1, 2008, DHS policy states that "For Medicaid, allowances in pension benefits for the Medicare Part B premium are not considered a reimbursement and should be budgeted as unearned income."  PEM 500 p. 6.

Many individuals who have pensions, including those who have retired from General Motors,  may be affected by this provision,

What Should Advocates Do?

Ensure that the new policy is only applied to Medicaid cases, not to other benefit programs.

Ensure that eligible clients apply for and receive help paying their Part B premiums under the Medicare Savings Programs.  Eligibility criteria for the Medicare Savings Programs are set forth in PEM Item 165. 

Finding Help

Most legal aid and legal services offices handle these types of cases, and they do not charge a fee.

You can locate various sources of legal and related services, including the free legal aid office that serves your county, at

You can also look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738.