What is the PIL (protected income level) for HCBS (home and community based services) from Medicaid?
Protected income level (PIL) is a term associated with the medically needy pathway to Medicaid eligibility. Often referred to as a medically needy program or spend down program, this pathway to Medicaid eligibility is intended for Medicaid applicants who have income over Medicaid’s limit, but who are unable to pay their high medical and long term care costs. While one may become income eligible for Medicaid waiver home and community based services (HCBS) via this pathway, one may also become income eligible for nursing home Medicaid or the regular state Medicaid plan (often called Aged, Blind and Disabled Medicaid) via this pathway.
The way the medically needy program works is that a certain amount of a Medicaid applicant’s monthly income is “protected” for him / her in order to cover non-medical expenses, such as rent, utilities, and food; this is the protected income level, which may also be called the medically needy income standard / limit. That said, having income over the PIL is not cause for Medicaid disqualification. Instead, a “spend down” or “share of cost”, which can be thought of as a deductible, is calculated using the PIL. Essentially, the PIL is subtracted from an applicant’s monthly income; any income over the PIL is the amount that must be spent down on medical care / care costs. As an example, let’s say a state’s PIL is $525 / month and the applicant has a monthly income of $860. This means the applicant has a “spend down” of $335 / month ($860 – $525 =$335). Once one has spent the money down to the medically needy income limit, he / she is eligible for Medicaid for the remainder of the spend down period.
The protected income level differs based on the state in which one resides. Furthermore, not all states offer a medically needy pathway to Medicaid eligibility. That said, just over half of the states do. (For state-by-state Medicaid eligibility information, including if a state has a medically needy program, click here). As a side note, the states that do not allow Medicaid applicants to become income eligible via the medically needy pathway offer an alternative way to become income eligible. This is via qualified income trusts.
It is important to note that some people may confuse the term, “protected income level” with Medicaid’s spousal impoverishment provision that protects monthly income for non-applicant spouses of nursing home Medicaid applicants or HCBS (home and community based services) Medicaid waiver applicants. The confusion likely comes into play because the minimum monthly maintenance needs allowance (MMMNA) protects a minimum amount of monthly income for non-applicant spouses. This rule is intended to ensure that non-applicant spouses have enough income to support themselves and allows Medicaid applicants to transfer their monthly income, up to a specific amount set by the federal government, to the non-applicant spouse.