FAA5.I Determining Benefits : 03 Expenses : E NA Medical Expenses and Deduction
NA Medical Expenses and Deduction
Information on this page refers to the Nutrition Assistance program
NA medical expenses are expenses incurred by participants who are elderly or have a disability.
Policy
Medical expenses are allowable as a deduction for NA participants who are elderly or have a disability. The medical expense must belong to and be billed to the participant.
An NA budgetary unit may be eligible for a Standard Medical Deduction (SMD) of $160 minus the $35 disregard for a net total of $125.
For a budgetary unit to be eligible for the SMD, a monthly medical expense of more than $35 must be verified with a new application or when new monthly medical expenses are reported.
AZTECS applies a $35 disregard to all medical expenses in the budgetary unit, regardless of the number of elderly participants or participants with a disability included in the case.
The following NA participants are eligible for a medical expense deduction when the amount of the medical expense is greater than $35:
Elderly participants or participants with a disability. (See NA Participants - Elderly or Have a Disability for specific requirements)
Deceased participants when both of the following requirements are met:
The deceased participant would have been eligible for the deduction in the month the expense was billed.
The remaining budgetary unit participants are legally responsible for the bill.
Participants who are eligible for and receiving SSI. When the participant begins receiving SSI, allow excess medical expenses incurred from the later of the following:
The date of the NA application.
The date when SSI eligibility began.
Budgetary units with elderly participants or participants with a disability receive one of the following deductions from their income:
A SMD of $160 minus a $35 disregard which equals $125.
An actual monthly out-of-pocket medical expense deduction, minus a $35 disregard when expenses exceed the $160 SMD amount.
AZTECS uses whichever medical deduction expense is higher to benefit the budgetary unit.
With a new application, or when the budgetary unit is reporting new monthly medical expenses, FAA explains the SMD option to the budgetary unit. The medical expenses are verified before the medical deduction can be used as follows:
At least $35.01 when using the SMD
All out-of-pocket expenses when they exceed $160 per month
Allowable and Not Allowable Medical Expenses
See the following for additional information on allowable medical expenses:
The following medical expenses are not allowable:
Charge accounts used for both medical expenses and other miscellaneous expenses
NOTE When a portion of the bill that is for medical expenses can be determined, only that portion is allowed. Medical expenses paid in monthly installments are considered billed when the statement is received. When no due date is indicated for a medical expense, the bill is considered due in the month following the billing date.
Charge account interest when medical expenses are paid in monthly installments
Medical bills that were paid before a new application month
Amounts carried forward from past billing periods and late charges even when included with the most recent billing and actually paid by the participant
Expenses covered by a reimbursement or vendor payment
Expenses covered by a second mortgage
Service Animals
The costs to secure and maintain professionally trained service animals that assist elderly participants or participants with a disability in performing normal living activities are allowable as NA medical expenses.
Service animals, including the following:
Seeing-eye animals
Hearing-ear animals
A service animal is defined as an animal that is trained to do work or perform tasks for elderly participants or participants with a disability. Participant statement verification is required to determine whether the service animal meets both of the following requirements:
The service animal is required because of a medical issue
The animal is specifically trained to perform work or tasks for the participant
It is not a requirement that a physician or medical professional prescribe the need for the animal when the participant is elderly or has a disability in accordance with NA requirements. (See NA Participants - Elderly or Have a Disability for specific requirements)
Allowable maintenance costs include the following:
Purchase of animal food
Veterinary services
Kennel fees
Training
NOTE Breeding and whelping fees are not allowable.
Hospital Costs
The costs for hospital stays, nursing home care, or outpatient treatment are allowable expense deductions when authorized by a licensed practitioner or U.S. medically qualified source(g). The total amount shown on the final bill reflects the amount due after all insurance payments have been received. This is considered the allowable amount.
NOTE These expenses are allowed for any participant who was in an NA budgetary unit immediately before entering a hospital or nursing home.
Medical and Dental Care Fees
Medical and dental care fees are allowable. This includes the following medical fees:
Psychotherapy
Rehabilitation services
Acupuncturists, massage therapists, herbalists, and other alternative medicine practitioners licensed and recognized by the State Medical Board and prescribed by a State-licensed practitioner
Medical Assistants
The costs for employing any of the following are allowable medical expenses:
Attendant
Homemaker
Home health aide
Nurse
Housekeeper
Dependent care service
When the participant provides two or more of the assistant's daily meals, an amount equal to the maximum NA allotment for a one-person budgetary unit is allowable. (See Thrifty Food Plan for the amount.)
When the budgetary unit has assistant care costs that could qualify as either a medical or a dependent care expense, the cost is allowed as a medical expense.
Medical Insurance Premiums
Medical and hospitalization insurance premiums intended to cover medical expenses are allowable. This includes health, dental, and vision insurance. When a group policy does not specify how much of the premium is for each person, the amount is divided among those included in the policy. Only the portion of the insurance premium assigned to the elderly or participant with a disability is budgeted.
Costs for accident and disability insurance benefits are not allowed. These include the following:
Benefits payable in lump sum settlements for death or dismemberment.
Income maintenance policies that cover mortgage or loan payments (including auto loans) while the policyholder or beneficiary who has a disability.
Medical Lodging
The cost of lodging to obtain medical treatment or services such as doctor or dental visits and supplies are allowable.
Up to $40 per day for lodging is allowed when the participant must travel over 50 miles to obtain medical treatments or services. Examples of medical treatments or services include the following:
Prescriptions
Eyeglasses
Dentures
Hearing aids
Sickroom equipment
NOTE The cost of food is not allowed as a deduction.
Medical Supplies
The following medical supply costs are allowable when authorized by a U.S. medically qualified source(g):
Syringes
Oxygen
Sickroom equipment
Purchase of other medically necessary medical supplies
Cost of or rental fees for prescribed equipment
The initial purchase, replacement, or repair of any of the following:
Dentures
Eyeglasses or contact lenses, when prescribed by an ophthalmologist or optometrist
Hearing aids
Telephonic aids for the hearing impaired
Prostheses
NOTE This does not include the cost of special diets.
Medical Transportation
The cost of transportation to obtain medical treatment or services such as doctor or dental visits and supplies, are allowable.
Examples of medical treatments or services include the following:
Prescriptions
Eyeglasses
Dentures
Hearing aids
Sickroom equipment
The amount of the transportation cost is determined using the following:
The mileage standard when private vehicles are used. (See mileage standard for the current amount)
The actual cost of fare when public transportation or common carrier is used.
Medicare Premium Medical Expense
Medicare insurance premiums for participants who are eligible to receive Social Security Administration (SSA) benefits are allowable. The premium is not allowed when paid by the State of Arizona.
Medication and Prescriptions
The following expenses are allowable deductions:
Prescription drugs.
Over-the-counter medication purchases (including insulin) can be allowed as medical deductions when approved by a U.S. medically qualified source(g).
Shipping, handling and postage for mail order or online prescription drugs.
The following purchases are not allowed as a deduction:
Any item that can be purchased with NA benefits. (See Allowable Purchases for a list of items)
Any item that is considered as a special diet.
Verification
Documented or collateral contact verification is needed to verify the obligation to pay NA medical expenses when any of the following occur:
A new application is submitted or new changes in out-of-pocket medical expenses is reported during the approval period:
When the budgetary unit is potentially eligible for the Standard Medical Deduction (SMD) verification of $35.01 must be provided.
When the budgetary unit is potentially eligible for medical expenses, which exceed the SMD, all medical expenses must be verified.
Renewal applications:
Changes of more than $25 in actual medical expenses which exceed the SMD must be verified.
NOTE Participant statement verification is allowed as primary verification at the time of the renewal interview, unless it is questionable(g), when one of the following occurs:
The budgetary unit is receiving the SMD.
Changes to medical expenses are less than $25 when the budgetary unit is receiving their actual medical expense in excess of the SMD.
The expense amount is questionable.
When the budgetary unit does not provide verification of the actual medical expenses that exceed the SMD, but provides verification of at least $35.01, the budgetary unit receives the SMD.
Verification that can be used includes the following:
Medical bills
Insurance receipts (latest payment or billing)
Current statement from a medical provider(g) responsible for providing care
Collateral contact with the medical provider or insurance company
Participant statement verification can be used when it is not questionable for one or more of following:
Renewal applications when the SMD was previously applied
A change that is less than $25 is reported on an existing medical expense when medical expenses exceed the SMD
Verification of a Medicare(g) expense that can be used includes the following:
Award or benefit letter from the Social Security Administration (SSA)
State Verification Exchange System (SVES)
Collateral contact with the SSA
Legal Authorities
7 CFR 273.9(d)
7 CFR 273.10(d)
7 CFR 273.9(d)(3)
Demonstration project approved by FNS until 2025
last revised 03/28/2022