Relating to medical income assistance trust fees

Description

House File 836 increases the amount to be paid or set aside each month for administration of a Medical Assistance Income Trust (MAIT) from no more than $10 per month to no more than $50 per month without court approval.

Background

Iowa Code section 633C.3 currently allows for a maximum of $10 per month to be set aside for the expenses of a MAIT for Medicaid beneficiaries. A MAIT, or Miller Trust, allows a beneficiary who would otherwise have too much in assets or income to qualify for Medicaid, provided that a certain amount of pension or Social Security income is placed into the Trust. A spouse may be eligible to receive funds from the Trust. If the beneficiary does not have a spouse, the balance of the Trust, beyond a monthly allowance for the beneficiary and the cost of administering the Trust, is paid to a nursing facility to cover the costs of nursing care. Any payments to nursing facilities to cover the cost of care for a beneficiary decrease the amount of State and federal dollars paid by Medicaid.

Assumptions

• Any decreases in the amount of income available from a qualified beneficiary for the cost of nursing care are costs borne by Medicaid.
• According to the Iowa Department of Health and Human Services (HHS), an average of 1,541 individuals are eligible for a MAIT monthly.
• An increase of $40 monthly for the maximum allowable administrative payment in the Bill will increase annual Medicaid costs for nursing facilities by approximately $740,000 beginning in FY 2026.
• The State will pay 37.16% of Medicaid costs for nursing facilities, while the federal government will pay 62.84%, the same as Iowa’s FY 2026 Federal Medicaid Assistance Percentage (FMAP). The FMAP rate in FY 2027 is assumed to equal the FY 2026 rate.
• According to the HHS, a one-time information technology (IT) implementation will be necessary at a cost of $308,000 in FY 2026. The State will pay 25.26% of costs for IT implementation, while the federal government will pay 74.74%.
• Any increase in State costs is expected to be funded from the HHS’s General Fund, Medicaid, and Community Access and Eligibility appropriations.

Fiscal Impact

House File 836 is estimated to increase costs to the State by approximately $353,000 in FY 2026 and by approximately $276,000 annually beginning in FY 2027.

Figure 1 — Estimated Cost of Increasing MAIT Administrative Payments

Source

• Department of Health and Human Services