25.5 REPAYMENT PLANS FOR MEDICAL PLANS

Medical Deductions Supplement

Section E

(1) Many times a household has established a billing or repayment arrangement with a medical services provider prior to application. This may be either a verbal or written agreement and is normally for payment on a one-time medical expense.

(2) Verify a repayment plan only if questionable. Document the case record giving the amount of the one-time expense, the name and address of the provider, and the length and terms of the repayment plan.

(3) How to Consider Monthly Payments

a. Monthly Installments

Consider monthly installment payments on a one time medical expense in the month they are due.

Count monthly installment payments for the entire length of the payment plan, even when it spans several certification periods.

When a household establishes a repayment plan after certification, count the monthly installment payments for the entire length of the payment plan only if the medical expense has not previously been considered.

Example: Mrs. Clark receives Social Security Disability. She is paying off some old debts under Chapter 13 (bankruptcy). She sends her lawyer $150 per month which he distributes among the people she owes. Some of the bills that are being paid are old doctor and hospital bills. $100 of the $150 goes towards medical bills, as verified by her lawyer. None of these bills have been previously considered. Therefore, Mrs. Clark may be allowed a $65 medical deduction per month ($100 - $35 exclusion).

b. Loans

Consider monthly payments on a loan that a household received to pay a one time only medical expense as a medical deduction. Verify that the loan, etc., is in fact for a medical expense.

Note: Normally, additional charges are added on to a loan or charge account. This is usually in the form of interest or finance charges, etc. Do not include these additional charges as part of the medical expense.

c. Charge Accounts

Once in a while, a household pays on a one time medical bill through a charge account, VISA, etc.

Consider the one-time medical expense as billed when the household receives the first charge account statement. At that time, give the household the option of treating the one-time medical expense as:

· a one-time medical deduction; or

· prorating the one-time expense over the remainder of the certification period.

Do not consider payment of a one-time medical expense through a charge account as a repayment plan. This is due to the fact that there is no means of establishing what portion of the individual’s monthly payment on the charge account is actually credited towards the medical expense, as opposed to other items that were also charged on the same account.

Glossary of Terms

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