Fighting Back Against Arbitrary Medicaid Denials for Failure to Respond

Fighting Back Against Arbitrary Medicaid Denials for Failure to Respond

by | Apr 10, 2025 | Consumer Advocacy, Legal Bulletin, Medicaid, Medicaid Planning, Medicaid Updates

The situation is all too common for Elder Law attorneys and their Medicaid applicant clients – a denial or termination of benefits due to supposedly insufficient documents, even when the agency is provided with everything it asked for. A recent decision, M.L. v. Essex County Division of Family Assistance and Benefits, A-0884-23 (March 18, 2025), highlights the typical scenario where the agency arbitrarily denies an application for reasons not apparent until after the fact. The court’s ruling underscores the importance of procedural fairness in Medicaid eligibility determinations and provides a summary of the law for advocates to use when pushing back on denials or terminations based on insufficient documents.

Case Background

M.L., an elderly nursing home resident, applied for Medicaid benefits on March 31, 2023. The Essex County Division of Family Assistance and Benefits initially requested additional documentation, including bank statements from Wells Fargo, to verify financial eligibility. M.L. promptly requested and obtained these records from his bank and provided copies to Essex County before the deadline. However, Essex County denied his application, claiming that he provided insufficient financial documentation and had unexplained withdrawals. M.L. promptly filed an appeal, as well as a second Medicaid application. The second application contained additional records, including records from a newly discovered Citizens Bank account. During the appeal, M.L. argued that he had substantially complied with Essex County’s requests. An administrative law judge (ALJ) agreed, ruling that M.L. had satisfied Medicaid eligibility requirements. However, the Division of Medical Assistance and Health Services (DMAHS) rejected the ALJ’s decision, affirming the original denial on the grounds that M.L. failed to provide all required documentation within the designated timeframe, including the additional statements from the Citizens Bank account.

Appellate Court’s Summary of the Law

Upon review, the Appellate Division found DMAHS’s final decision to be arbitrary, capricious, and unreasonable. The Court provided a useful review of New Jersey regulatory law that applies in these circumstances, which is summarized below.

The local County Welfare Agency (CWA) and its caseworkers “exercise direct responsibility in the application process to . . . receive applications.” N.J.A.C. 10:71-2.2(c)(2). The caseworker is charged with evaluating an applicant’s eligibility for Medicaid benefits. N.J.S.A. 30:4D-7a; N.J.A.C. 10:71-2.2(a); N.J.A.C. 10:71-3.15. “The process of establishing eligibility involves a review of the application for completeness, consistency, and reasonableness.” N.J.A.C. 10:71-2.9.

While the applicant is “the primary source of information,” the caseworker is responsible for making “the determination of eligibility and to use secondary sources when necessary, with the applicant’s knowledge and consent.” N.J.A.C. 10:71-1.6(a)(2). The caseworker is not limited in the use of secondary sources to obtain necessary verification information. N.J.A.C. 10:71-4.1(d)(3) states:

The CWA shall verify the equity value of resources through appropriate and credible sources . . . . If the applicant’s resource statements are questionable, or there is reason to believe the identification of resources is incomplete, the CWA shall verify the applicant’s resource statements through one or more third parties.

The applicant is responsible for cooperating fully with the verification process if the caseworker must contact a third party to verify an applicant’s resources. N.J.A.C. 10:71-4.1(d)(3)(i). The agency may perform a collateral investigation to “verify, supplement or clarify essential information.” N.J.A.C. 10:71-2.10(b).

Under N.J.A.C. 10:71-2.2, the caseworker must communicate with the applicant regarding the claimed deficiencies and then, under N.J.A.C. 10:71-2.10(b), provide an opportunity for the applicant to verify, supplement, or clarify the information before denying an application.

N.J.A.C. 10:71-2.2(e)(1) to (3) requires an applicant to:

  • Complete, with assistance from the CWA if needed, any forms required by the CWA as a part of the application process;
  • Assist the CWA in securing evidence that corroborates his or her statements; and
  • Report promptly any change affecting his or her circumstances.

N.J.A.C. 10:71-2.2(c)(1) to (5) requires a caseworker to:

  • Inform the applicants about the purpose and eligibility requirements for Medicaid Only,
  • Inform them of their rights and responsibilities under its provisions and inform applicants of their right to a fair hearing;
  • Receive applications;
  • Assist . . . applicants in exploring their eligibility for assistance;
  • Make known to . . . applicants the appropriate resources and services both within the agency and the community, and, if necessary, assist in their use; and
  • Assure the prompt and accurate submission of eligibility data to the Medicaid status files for eligible persons and prompt notification to ineligible persons of the reasons for their ineligibility.

State agencies must “turn square corners” with the public they serve in carrying out their statutory responsibilities. W.V. Pangborne & Co. v. N.J. Dep’t of Transp., 116 N.J. 543, 561–62 (1989). When this bedrock principle is read together with the above regulations, the dispositive legal conclusion is that both the applicant and the County have a duty under the regulations to take affirmative steps to communicate with each other regarding a pending application. The scope of this joint duty clearly includes the parties’ efforts to clarify prior communications about a pending application.

Court’s Ruling

Based on the summary of the law, the Appellate Division found that the applicant promptly gave the County what it asked for– namely, the Wells Fargo statements. Upon receipt, the County’s duty was to review the pending application and notify the applicant concerning what, if any, additional information was required to make an eligibility determination. The record showed that the County failed to do so. Instead, it denied the March 31 application and only then informed the applicant that his application was deficient.

It followed that DMAHS’s final administrative decision adopting the improper denial of the March 31 application was arbitrary, capricious, and unreasonable. The Appellate Division reversed DMAHS’s decision and sent the case back to the County, instructing the agency to reopen and process M.L.’s Medicaid application.

Final Thoughts

Though practitioners know it is often the exception, this case serves as a crucial reminder that government agencies must adhere to procedural fairness when assessing Medicaid applications. Applicants have a right to clear communication and a reasonable opportunity to provide necessary documentation. Furthermore, state agencies cannot deny benefits based on minor technicalities or failures in their own procedures.

For Medicaid applicants facing similar challenges, this ruling reinforces the importance of persistence and legal advocacy. If you or a loved one has been wrongfully denied Medicaid benefits, consider consulting with an experienced attorney to ensure your rights are protected.

Medicaid is on the Chopping Block Again: Who Will Be Impacted in New Jersey?

Medicaid is on the Chopping Block Again: Who Will Be Impacted in New Jersey?

by | Mar 6, 2025 | Medicaid, Medicaid Planning

Since President Donald J. Trump’s re-election, discussions about the future of Medicaid have intensified. In January 2025, the Trump administration temporarily paused federal financial assistance—sparking widespread uncertainty about Medicaid funding. Although the order was later rescinded, concerns over potential funding disruptions remain.

In February 2025, House Republicans narrowly passed a budget resolution proposing $4.5 trillion in tax cuts paired with $2 trillion in spending reductions over the next decade. Notably, the budget includes $880 billion in cuts to Medicaid, a figure that has ignited debates, even within the GOP. And let’s be clear in case you hear anyone saying Medicaid is safe – the nonpartisan Congressional Budget Office has stated that Republicans cannot meet their $880 billion target without resorting to drastic cuts to Medicaid. To understand what’s at stake, let’s examine how Medicaid is structured in New Jersey.

What Is Medicaid?

Medicaid is a joint federal and state program that offers free or low-cost health coverage to eligible low-income individuals and families. It covers a broad range of services—from doctor visits and hospital stays to prescription drugs, preventive care, mental health services, and long-term care. Each state administers its own Medicaid program within federal guidelines, which means eligibility requirements and covered services can vary. Medicaid primarily serves very low-income adults, children, pregnant women, seniors, and individuals with disabilities, ensuring that vulnerable populations have access to essential healthcare. In New Jersey, Medicaid is divided into several programs, each targeting specific groups and each with their own eligibility criteria.

A. NJ FamilyCare Medicaid

NJ FamilyCare is a Medicaid program that provides free or low-cost coverage to eligible New Jersey residents under age 65. It includes Medicaid, the Medicaid expansion under the Affordable Care Act (New Jersey is one of the states that has opted in by accepting federal funding), and the Children’s Health Insurance Program (CHIP). The expansion Medicaid component is widely expected to be targeted for cuts because it includes the often unfairly maligned Affordable Care Act Medicaid – the “Obamacare” expansion of Medicaid.

  • Who Does NJ FamilyCare Medicaid Cover?

Adults aged 19 to 64 can access NJ FamilyCare if their household income is at or below 138% of the Federal Poverty Level/FPL (133% plus a 5% income disregard). This is incredibly low and many adult minimum wage workers find themselves ineligible for Medicaid. For example this is a mere $21,597 per year for an individual and $44,367 for an adult living in a household of four. Pregnant people and children have more generous eligibility limits at 205% FPL for pregnant people and up to 355% FPL for children. These categories all fall under the umbrella of Modified Adjusted Gross Income (MAGI) Medicaid and only consider income, not assets when determining eligibility. Therefore, anyone of working age who abruptly loses their income can apply and receive health coverage without consideration of their assets such as retirement savings.

  • Who Will Be Impacted When NJ FamilyCare is Cut?

The answer is simple. Pregnant women, children and low wage-earning adults who don’t have access to or cannot reasonably afford high-cost employer sponsored coverage will take the brunt of the impact.  

B. SSI Medicaid and “Medicaid Only”

Individuals in New Jersey who qualify for Supplemental Security Income (SSI) benefits (a basic income support program) are automatically enrolled in Medicaid ensuring that they have access to health coverage. In addition, the “Medicaid Only” program extends coverage to individuals who have income and resources under the SSI limits but don’t actually receive SSI payments.

  • Who Does SSI Medicaid and Medicaid Only Cover?

SSI is a program that provides income support to seniors 65 and over, blind individuals, and disabled individuals who have zero or very low income. For 2025, eligible individuals with countable income below $967 per month and $2,000 or less in assets can qualify for SSI payments. For a couple the figures are $1,450 per month and $3,000 in assets. Essentially these are individuals with almost nothing in terms of basic income and assets who are living month to month.

  • Who Will Be Impacted When SSI Medicaid and Medicaid Only is Cut?

The answer is pretty straightforward, though depressing. Seniors and individuals who have been found to meet the federal government’s standards for blindness and permanent disability, who have zero or very little income. Essentially the poorest senior citizens and the poorest individuals with disabilities may find themselves without access to essential health coverage when SSI Medicaid and Medicaid Only is cut. 

C. Disabled Adult Child (DAC) Medicaid

Disabled Adult Child (DAC) Medicaid is specifically targeted toward individuals with disabilities, whose condition began before age 22. It allows them to retain Medicaid benefits even when their income suddenly exceeds SSI eligibility parameters.

  • Who Does DAC Medicaid Cover?

Essentially the program allows individuals with disabilities, whose condition began before age 22, to maintain Medicaid coverage even if they become ineligible for SSI or Medicaid Only due to receiving Social Security Disability Insurance (SSDI) benefits based on a parent’s earnings record. This situation typically arises when a parent retires, becomes disabled, or passes away, triggering SSDI benefits for the adult disabled child. While the increase in income from SSDI may disqualify the individual from SSI, federal law ensures the continuation of Medicaid benefits for those who were previously eligible under SSI but have lost it due to SSDI benefits. This safeguard is crucial, as Medicaid often covers services and supports not provided by Medicare or private insurance, ensuring that individuals with disabilities continue to receive necessary care without interruption.

  • Who Will Be Impacted When DAC Medicaid is Cut?

DAC Medicaid primarily benefits individuals with developmental and intellectual disabilities. However, since it impacts anyone whose condition began before the age of 22 it includes a wide variety of individuals struggling with physical, intellectual or mental disabilities. It’s sad but true – when this program is cut it will impact adult disabled individuals who have relied on Medicaid for most of their life.

D. Aged Blind Disabled (ABD) a/k/a Special Medicaid Program

In New Jersey, the Aged, Blind, and Disabled (ABD) Medicaid program, also known as Special Medicaid, provides supplemental healthcare coverage to seniors and individuals with disabilities who receive Medicare benefits. The program pays Medicare premiums, covers Medicare co-pays and deductibles, and offers services not covered by original Medicare Part A and B such as dental coverage. 

  • Who Does ABD/Special Medicaid Cover?

The program is open to low income individuals who are 65 years or older, blind or disabled and also receive Medicare. The income limits for ABD Medicaid are based on the Federal Poverty Level (FPL). As of 2025, the income limit is 100% of the FPL, which is $1,304 for an individual and $1,763 for a married couple. The program also has asset limits:  for individuals, the limit is $4,000, and it is $6,000 for couples. 

  • Who Will Be Impacted When ABD/Special Medicaid is Cut?

Retired seniors with low income who are living month to month on social security will be impacted significantly. Essentially this will punish retired individuals who worked in low wage jobs.  It will also impact low income blind and disabled individuals who receive Medicare. It is sad as these individuals living off of less than $2000 per month will now need to figure out how to pay additional healthcare expenses, including Medicare premiums, co-pays and deductibles, and essential non-covered services such as dental and home health aides. Many will forego essential medical care altogether due to the cost.

E. NJ Workability

NJ WorkAbility is a program that enables employed individuals with disabilities to obtain comprehensive Medicaid coverage. The program has generous limits compared to other Medicaid programs. Essentially it was designed to encourage individuals with disabilities to work without fear of losing their health insurance.

  • Who Does NJ WorkAbility Medicaid Cover?

Eligibility for NJ WorkAbility Medicaid was recently expanded and is now relatively simple. You must be a New Jersey resident, have a disability determination by the Social Security Administration or the State, and have proof of employment. The program does not specify a minimum number of work hours or earnings to qualify, so even individuals with small part-time or irregular jobs can qualify as long as there is proof of employment. The program does not have an asset limit and does not count a spouse’s income. People with countable income above 250% FPL may have to pay a premium on a rising scale.

  • Who Will Be Impacted When NJ WorkAbility Medicaid is Cut?

Working individuals with disabilities will lose insurance or have increased insurance and healthcare costs when NJ WorkAbility is cut. This is unfortunate, especially when the people advocating for Medicaid cuts often claim that Medicaid recipients choose not to work so they can keep public benefits. 

F. Managed Long Term Services and Supports (MLTSS) Medicaid

Managed Long Term Services and Supports (MLTSS) is a New Jersey Medicaid program designed to provide comprehensive long-term care services to individuals who require assistance due to age, disability, or chronic illness. MLTSS covers services beyond those offered by standard Medicaid, including nursing home care, home and vehicle modifications, home-delivered meals, and assisted living services.

  • Who Does MLTSS Medicaid Cover?

Because Medicare does not cover long term care such as nursing home care, qualifying for Medicaid is typically the only way most people can pay for these services. However, this program is extremely complicated, and many individuals hire a lawyer when applying for the program. The application process includes a “five-year lookback,” which is a detailed examination of the income and assets of the applicant and their spouse in the prior 60-month period. To be eligible, an individual applicant’s monthly income must not exceed $2,901 (2025) and countable assets are limited to $2,000. The application process includes looking at a married couples combined assets even if they are not jointly owned. The application often will need to spend down assets in order to meet the $2000 limit. The non-applicant spouse may also need to spend down assets because the amount he or she can retain is limited to between $31,584 and $157,920. These guidelines are meant to ensure that poor and middle-class individuals have access to essential long-term care services while maintaining some financial stability.

  • Who Will Be Impacted When MLTSS Medicaid is Cut?

With nursing care often costing in excess of $10,000 per month MLTSS Medicaid and similar programs throughout the county has become the backbone of our long term care system. Any cuts to this program will cause significant disruption to people in need of nursing home, assisted living or similar services at home.

Final Thoughts

The proposed Medicaid cuts could have far-reaching consequences for some of our most vulnerable citizens. In New Jersey, each Medicaid program serves a critical role—from providing essential coverage to low-income adults, pregnant individuals, and children to supporting seniors and those with disabilities. Drastic reductions in Medicaid funding would not only undermine healthcare access but also exacerbate financial insecurity for many families.

Unlocking Zero Cost Health Coverage for Low Income Seniors and the Disabled: How to Qualify for ABD Medicaid in New Jersey

Unlocking Zero Cost Health Coverage for Low Income Seniors and the Disabled: How to Qualify for ABD Medicaid in New Jersey

by | Feb 24, 2025 | Medicaid

Navigating the healthcare system can be challenging, especially for “Dual Eligible” individuals who are already on Medicare. Low income Medicare recipients in New Jersey may also qualify for Aged Blind Disabled (ABD) Medicaid which provides crucial support to help cover medical expenses and services that are not covered by Medicare. This blog will walk you through the basics of qualifying for ABD Medicaid in New Jersey, including eligibility criteria, and the application process.

What is Aged Blind Disabled Medicaid?

ABD Medicaid is a federally funded program designed to supplement the coverage provided by original Medicare Part A (hospital) and B (medical). The program pays Medicare premiums, covers Medicare co-pays and deductibles, and offers services not covered by original Medicare Part A and B such as dental coverage. The ABD program is available to individuals who are (a) aged (65 or older), blind, or determined disabled, (b) have limited income, and (c) limited resources.

Eligibility Criteria

To qualify for ABD Medicaid in New Jersey, applicants must meet specific financial and non-financial requirements.

  1. Aged, Blind, or Disabled: The program is open to individuals who are “Aged” – 65 years or older, Blind according to Social Security standards, or meet Social Security’s definition of Disabled, which generally requires a physical or mental condition that substantially limits one’s ability to work and is expected to last at least 12 months or result in death.
  2. Low Income: Income limits for ABD Medicaid are based on the Federal Poverty Level (FPL) and vary depending on household size. As of 2025, the income limit is 100% of the FPL, which is $1,304 for an individual and $1,763 for a married couple.
  3. Limited Resources: Applicants must have limited resources to qualify. For individuals, the resource limit is $4,000, and for couples, it is $6,000. Some assets, such as a primary residence, one vehicle, and personal belongings, are excluded from these limits.
  4. Citizenship and Residency: Applicants must be U.S. citizens or qualified non-citizens and reside in New Jersey.

Dual Eligibility for Medicare and Medicaid

Dual eligibility means that an individual receives benefits from both Medicare and Medicaid, which can significantly reduce out-of-pocket healthcare costs. Individuals 65 and over are required to enroll in Medicare, and low income individuals are often surprised when this happens because their primary insurance transitions from Medicaid to Medicare. Many even lose Medicaid access altogether because ABD Medicaid income and asset eligibility is much harder to meet than the ordinary New Jersey Family Care Medicaid that is available to people 64 and under. Nonetheless, Medicare recipients who meet the eligibility criteria outlined above can have access to both Medicare as their primary insurance and ABD Medicaid. Even those who don’t qualify for ABD Medicaid may still have access to a Medicare Savings Program, which can help cover Medicare premiums, deductibles, and co-pays.

How to Apply

Applying for ABD Medicaid in New Jersey involves several steps. Here’s a quick guide to help you through the process:

  1. Gather Necessary Documents – Before applying, collect all required documentation to support your application. This will include, Social Security disability determination letter, proof of income (pay stubs, Social Security award letters, etc.), asset statements (bank accounts, property deeds, etc.), proof of U.S. citizenship or qualified non-citizen status, proof of New Jersey residency (lease agreements, utility bills, etc.).
  2. Submit Your Application – You can apply for ABD Medicaid online, by mail, or in person at your county’s Board of Social Services.
  3. Respond to Requests for Additional Information – After submitting your application, you may be contacted for additional information or documentation. Be sure to respond promptly to avoid denial of the application or delays in processing.

What Happens After Approval?

Once approved, you’ll receive a state Medicaid ID card, as well as a card from the insurance company administering your benefits, also called a Managed Care Organization or MCO. You choose your MCO when filling out the application. New Jersey currently has 5 MCOs, including, Aetna Better Health of New Jersey, Fidelis Care, Horizon NJ Health, UnitedHealthcare Community Plan, and Wellpoint (formerly Amerigroup New Jersey).

You should keep your address updated with your MCO and the state because you must renew your Medicaid eligibility annually to ensure continued coverage. The state will send you a renewal notice with instructions.

What If You Don’t Qualify?

If your application is denied, you have the right to appeal the decision. You can request a Fair Hearing. You may also reapply, which is recommended if you did not provide necessary documentation in a timely manner or were ineligible at the time of the application, but now are eligible. Additionally, other programs, such as the Specified Low-Income Medicare Beneficiary (SLMB) or the Pharmaceutical Assistance to the Aged and Disabled (PAAD) programs, may help provide assistance with Medicare premium and drug costs.

Tips for a Successful Application

  • Get Organized: Collect the documets you will need for the application before submitting the application.
  • Stay Organized: Keep copies of everything you submit and all letters you receive in response. It is also a good practice to use cover letters listing the documents you are sending as well as responses to questions. Also make sure you date your letters to show when responses were sent.
  • Seek Assistance: If you’re unsure about the process, contact your county’s Board of Social Services or a local advocacy group for help.
  • Be Honest and Thorough: Provide accurate information to avoid delays or complications.

Conclusion

ABD Medicaid is a lifeline for many aged, blind, and disabled individuals in New Jersey. While the application process may seem daunting, understanding the eligibility criteria and following the steps outlined above can make it more manageable. For those who qualify for both Medicare and Medicaid, dual eligibility provides additional financial relief and expanded coverage, ensuring access to comprehensive healthcare services. If you have questions or need further assistance, don’t hesitate to reach out to your county’s Board of Social Services or explore online resources provided by the New Jersey Department of Human Services.

Over Four Years After D.C. v. DMAHS, New Jersey Still Fails to Follow the “Screen Before Terminate” Rule

Over Four Years After D.C. v. DMAHS, New Jersey Still Fails to Follow the “Screen Before Terminate” Rule

by | Feb 20, 2025 | Legal Bulletin, Medicaid

Public health advocates applauded the Court’s decision in D.C. v. Division of Medical Assistance & Health Services, 464 N.J. Super. 343 (App. Div. 2020), because it resolved a longstanding logistical issue that caused severe hardship for people transitioning from one Medicaid program to another. Specifically, the New Jersey Appellate Division ruled that state Medicaid agencies must screen beneficiaries for eligibility in alternative programs before terminating their existing benefits, ensuring a seamless transition and continuous benefits. Despite the Court’s clear mandate, over four years later, New Jersey has repeatedly failed to implement an effective “screen before terminate” system, leaving many vulnerable individuals exposed to gaps in coverage and financial hardship. Let’s revisit the case.

Factual Background

A married couple receiving Social Security Disability benefits were enrolled in New Jersey’s Aged, Blind, and Disabled (ABD) Medicaid Program. The program provides Medicaid health coverage for people with limited income who are blind, have been determined disabled by the Social Security Administration, or are 65 and over. However, following a change in circumstances the couple’s income exceeded the limit ABD eligibility. As a result, the Essex County Board of Social Services sent them a letter indicating that their ABD coverage would terminate effective August 31, 2017. Although they no longer qualified for ABD Medicaid, the couple still qualified for the Specified Low-Income Medicare Beneficiaries (SLMB) Program, which covers Medicare Part B premiums for low-income Medicare beneficiaries. The couple applied for the SLMB Program on August 30, 2017. Although they clearly qualified, the Essex County explained that their application could not be processed until their ABD benefits were officially terminated, which caused a gap in benefits. They filed for a Fair Hearing before an Administrative Law Judge who concluded that since benefits could be applied retroactively for 90 days, the state could terminate benefits without first assessing eligibility for other programs. The ALJ’s decision was adopted by the Division of Medical Assistance & Health Services (DMAHS) and the matter was then appealed to the Superior Court, Appellate Division.

Appellate Division Decision

The couple argued that federal regulations, including provisions found at 42 CFR 435.916(f)(1), mandate that state agencies screen beneficiaries for eligibility in other Medicaid programs before terminating existing benefits. They contended that the Division of Medical Assistance and Health Services (DMAHS) failed to perform this pre-termination screening for the SLMB Program, thereby causing a gap in benefits. DMAHS argued that the SLMB Program was “a Medicare savings program that allows states to pay Medicare Part B premiums,” rather than a Medicaid program, and since beneficiaries cannot be eligible for Medicaid and SLMB in the same month, they had to wait until coverage was terminated before applying. They argued that the requirement to screen for other programs prior to termination did not apply because SLMB was not a Medicaid program.

Importantly, the ALJ and DMAHS relied heavily on the 90 day retroactivity of New Jersey Medicaid to justify forcing people to have a disruptive gap in benefits, rather than implement a more efficient system. Under these rules, SLMB benefits could be applied retroactively for up to three months. The agency’s rationale was that even if there was a gap in immediate coverage, the retroactive provisions would compensate for the period during which the petitioners were without benefits. However, the couple argued that this reasoning did not absolve the agency of its responsibility to ensure a seamless transition in coverage. They also noted that the gap created a hardship because they had current obligations such as rent, food, and utilities.

The court found that SLMB was clearly a Medicaid program and that DMAHS erred by not screening the couple for eligibility in the SLMB Program before terminating their ABD benefits. The court held that relying on retroactive benefits subverted the purpose of pre-termination screening and did not justify a policy that permitted gaps in essential healthcare coverage. The court held that this was a circumstance where DMAHS acted in a way that was clearly inconsistent with its statutory mission and legislative policy. The court concluded that DMAHS’s decision was arbitrary, unreasonable, and erroneous, and therefore subject to being overturned. The decision was clear: DMAHS was required to proactively assess eligibility for other programs to prevent the disruption of benefits.

Current Challenges – County-Level Variability

In New Jersey, a significant portion of Medicaid eligibility decisions are handled by county-level agencies. As a result, compliance with the pre-termination screening requirement varies considerably from one county to another. Limited resources, inexperienced staff, and clerical errors lead to inconsistent application of the screening mandate. Instead of proactively transferring eligible beneficiaries between various Medicaid programs—such as SSI Medicaid, NJ Family Care/MAGI Medicaid, ABD Medicaid, MLTSS Medicaid, Workability Medicaid, and SLMB—the county offices often merely provide a referral or a new application and leave beneficiaries to navigate the system on their own.

Despite the clear mandate from the court, DMAHS has yet to develop and implement a robust, statewide system for conducting the required pre-termination eligibility screening and facilitating seamless transitions between programs. In practice, many beneficiaries continue to experience gaps in coverage because DMAHS appears to lack an integrated, automated system that cross-references a beneficiary’s eligibility for other Medicaid programs prior to terminating existing benefits. This means that the court’s requirement is not uniformly applied, leaving beneficiaries vulnerable to disruptions in care.

These challenges underscore the need for DMAHS and county agencies to collaborate on developing a comprehensive, statewide protocol. Or perhaps eliminate the county system altogether. Such a system should not only automate the screening process but also establish clear guidelines and accountability measures to ensure that beneficiaries do not experience unnecessary interruptions in their Medicaid benefits.

Final Thoughts

The ruling in D.C. v. Division of Medical Assistance & Health Services emphasizes the critical need for proactive administrative practices in the management of Medicaid benefits. By failing to pre-screen for eligibility in alternative programs, DMAHS not only violated federal regulatory requirements but also jeopardized the well-being of vulnerable low income people. Moreover, the lack of a cohesive, state-wide system to implement this requirement further compounds the problem, resulting in inconsistent and often inadequate protections for those most in need. This case just one example highlighting the need to reexamine and overhaul Medicaid administrative processes.

Navigating Supplemental Security Income (SSI) Medicaid in New Jersey

Navigating Supplemental Security Income (SSI) Medicaid in New Jersey

by | Feb 8, 2025 | Medicaid, Medicaid Planning, Trusts

Supplemental Security Income (SSI) is a federal program that provides basic income support to individuals who are over the age of 65, are blind, or have been determined disabled by the Social Security Administration (SSA). In New Jersey, SSI recipients are automatically enrolled in Medicaid, which ensures access to essential medical services. This seamless integration creates a vital safety net for vulnerable populations who need extra financial and healthcare support.

In this post, we’ll break down what SSI Medicaid is in New Jersey and explain the eligibility rules—including income and asset requirements.

What is SSI Medicaid in New Jersey?

SSI Medicaid provides healthcare coverage to those who qualify for federal SSI benefits. Because New Jersey is designated as a “1634 state,” SSI recipients are automatically enrolled in Medicaid without needing to complete a separate application. This automatic enrollment guarantees that vulnerable residents have access to comprehensive healthcare services as soon as they become eligible for SSI.

Eligibility Criteria

To qualify for SSI Medicaid in New Jersey, applicants must meet the following federal SSI requirements:

1. Categorical Requirements

  • Age: 65 or older,
  • Vision: Blind,
  • Disability: Have a qualifying disability as defined by the Social Security Administration.

2. Financial Requirements

  • Income: Must fall within prescribed monthly thresholds.
  • Assets: Must remain below specific limits.

3. Residency and Citizenship

  • Residency: Must be a resident of New Jersey.
  • Citizenship: Must be a U.S. citizen or have lawful non-citizen status.

Income and Asset Requirements

SSI Medicaid eligibility is closely tied to both income and asset levels, ensuring that benefits are directed toward those with truly limited financial resources.

In New Jersey, for 2025, income must not exceed $967 per month for an individual, and $1,450 per month for a married couple. Countable income includes not only traditional wages but also other sources of income such as pensions, Social Security benefits, or even certain types of assistance. It’s important to note that while many forms of income count toward these limits, there are also specific exclusions built into the system. For example, a modest portion of earned income is partially disregarded to encourage self-sufficiency. This means that not every dollar earned by a beneficiary will be counted on a one-to-one basis toward the income limit.

In tandem with income restrictions, asset limits are a critical factor in SSI Medicaid eligibility. For an individual, countable assets must remain below $2,000, and for couples, the threshold is set at $3,000. Here, “countable assets” refer to cash, bank accounts, stocks, and other financial resources that could be converted to cash. However, the program recognizes that certain assets are essential for an individual’s day-to-day life and therefore exempts them from consideration. For instance, the primary residence is excluded from the asset calculation up to an equity value of $1,033,000, ensuring that having a home does not disqualify someone from receiving assistance. Similarly, one vehicle is exempt—so owning a car, which is often necessary for transportation to medical appointments or work, does not negatively impact eligibility. Personal property, including household goods and certain burial funds (up to $1,500), are also not counted.

Strategies to Maintain Eligibility

Maintaining eligibility for SSI Medicaid requires ongoing attention to financial details and proactive planning. Beneficiaries can use a variety of strategies to protect their benefits while working toward greater financial independence. Below are some key strategies:

1. Timely Reporting of Changes

One of the most critical aspects of maintaining eligibility is promptly reporting any changes in your circumstances to both the Social Security Administration (SSA) and New Jersey Medicaid. This includes changes in income, marital status, residency, or asset levels. Keeping these agencies updated helps avoid overpayments, penalties, or even termination of benefits.

2. Avoiding Improper Asset Transfers

It can be tempting to make gifts or transfer assets to a family member, but doing so without proper planning can lead to penalties or periods of ineligibility. Transferring assets at below-market values or without appropriate legal guidance can count against you. Before making any such transfers, it’s wise to consult with a legal expert or benefits counselor.

3. Creating a Special Needs Trust (SNT)

A Special Needs Trust is a powerful tool for individuals who wish to preserve their eligibility for SSI Medicaid while setting aside funds for future needs. By placing assets into an SNT, beneficiaries can ensure that these resources are used for supplemental purposes (such as education, therapy, or unforeseen medical expenses) without counting toward the asset limits. This trust is carefully structured so that while the funds are available to enhance quality of life, they do not disqualify an individual from receiving benefits.

4. Monitoring Income and Savings

Regularly reviewing your income sources and savings is crucial. Even small changes in earnings—whether from part-time work, inheritances, or other windfalls—can push you over the eligibility thresholds. Establishing a budgeting strategy and working with a financial advisor familiar with SSI rules can help you plan effectively and avoid unintentional disqualifications.

5. Utilizing Work Incentives Wisely

For those able to work, taking advantage of the work incentives offered under SSI is a great way to boost income while safeguarding benefits. However, it is important to plan carefully. Make sure to keep track of how much you earn each month and consult with a benefits counselor to understand how your work might affect your eligibility. Programs like the trial work period can provide a buffer as you transition into employment, but adherence to reporting guidelines remains essential.

6. Professional Guidance

Given the complexity of the rules surrounding SSI Medicaid, partnering with professionals—a Medicaid planning attorney, benefits counselor, or financial advisor—can be invaluable. These experts can help you navigate the nuances of income limits, asset management, and work incentives while ensuring you remain in compliance with all reporting requirements.

By incorporating these strategies into your financial planning, you can help secure your SSI Medicaid benefits and maintain a safety net for essential healthcare coverage.

Key Considerations

  • SSI vs. SSDI:
    Remember that SSI is a needs-based program, while Social Security Disability Insurance (SSDI) is based on work history. Medicaid rules differ between the two programs.
  • NJ FamilyCare:
    SSI Medicaid is part of New Jersey’s broader Medicaid initiative, NJ FamilyCare, which aims to provide comprehensive healthcare coverage to all eligible residents.

Conclusion

SSI Medicaid in New Jersey offers a lifeline for those who need extra financial and healthcare support. By understanding the intricacies of income and asset rules and staying informed about work incentives and reporting requirements (a topic for another day), beneficiaries can maintain uninterrupted coverage while exploring opportunities to improve their financial independence. If you’re facing complex situations—whether it involves asset management or navigating the work rules—it’s wise to consult with a Medicaid planning attorney or a benefits counselor.

Navigating SSI Medicaid can be challenging, but with the right information and careful planning, you can secure the benefits you need to ensure your well-being and move toward greater self-sufficiency.