Department of Human Services
Food Stamp Online Policy Manual
II. Treatment of Medical Expenses
Medical Deductions Supplement
(a) Initial Applications
Consider only the existing balance still owed in the month of application. Do not allow any portion paid prior to the month of application.
Example: Mr. Jones, who is eligible for a medical deduction, pays $100 on a $500 hospital bill on February 2. He applies for food stamps on February 15. Consider the total $500 as a one-time medical expense because this was the amount owed in the month of February.
Example: Mr. Fred, who is eligible for a medical deduction, pays $150 on a $600 surgical bill on March 30. He applies for food stamps on April 1. Consider only $450 as a one-time medical expense because $150 was paid prior to the application month.
(b) Reported After Initial Certification
Consider only the existing balance still owed on a one-time expense at the time it is reported. Do not allow any portion of the expense paid prior to reporting it.
Example: A currently certified household reported a $300 one-time medical expense on April 20. The household had already paid $50 on the bill, prior to reporting it. Consider only $250 of the one-time expense.
(2) One-Time Deduction vs Proration of a One-Time Expense
(a) Households reporting a one-time only medical expense, when a repayment plan has not been established, have the option of:
1. considering the expense as a one-time deduction; or
2. having the expense prorated over the certification period (if it is reported at the time of application), or prorated over the remainder of the certification period (if it is reported as a change during the certification period.)
(b) Households reporting a one-time only medical expense when a repayment plan has been established, have the option of:
1. considering the expense as a one-time deduction; or
2. having the repayment plan considered over the length of the repayment agreement.
Note: Do not prorate a one-time medical expense over the certification period when a repayment plan has already been established.
(c) Fully explain to the household the following, to assist it with making a decision:
1. the difference in benefits, based on the various options available;
2. that a one-time expense may be considered only once, even if it remains unpaid or there is a balance still owing at a later date; and
3. that if a repayment plan already exists, it may be counted the entire length of the agreement. However, if the HH establishes a repayment plan after the one-time expense has been counted, it cannot be considered again.
If the household elects a one-time deduction, the EW must:
(a) establish whether the individual is entitled to a reimbursement for the medical expense, and if so, how much; and
(b) establish whether any portion of the medical expense has already been paid by the individual.
Once the one-time medical expense has been allowed, do not allow it again, even if there is still a balance owing on the bill.
Example: Mr. Bruce reported and received consideration for a $560 hospital bill as a one-time medical deduction in March.
When Mr. Bruce applied for recertification in June, he reported that he still owed $300 on the bill. Do not count this because it has already been considered.
Example: Mrs. Black brings in verification of a one-time medical expense on December 30, after cut-off. She is currently certified through the following October.
Because the medical expense is not large enough to count if prorated over the remainder of her certification period, she chooses to receive a one-time deduction. Since it is too late to allow the deduction for January, allow the one-time medical expense deduction for February.
The one-time medical deduction would be removed from the budget effective March.
(a) When the household elects to have the one-time medical expense prorated, they must:
1. establish whether the household has a repayment plan; and
2. establish whether the individual is entitled to a reimbursement and the amount of the reimbursement.
(b) Prorating One-Time Medical Expense at Application
If the expense is reported and verified during the application processing period, divide the amount of the countable expense by the number of months in the certification period to obtain a monthly figure.
Example: Mrs. Long reports a $2,500 hospital bill at application. She has not made arrangements to pay on the bill, but provides verification that her hospitalization insurance will pay $1,000 of the bill. She wants the $1,500 balance prorated over her 12-month certification period ($125 per month).
After allowing the $35 per month exclusion, the EW allows Mrs. Long a $90 per month medical deduction ($125 - $35 = $90).
(c) Prorating One-Time Medical Expenses During the Certification Period
If the expense is reported during the certification period, divide the amount of the countable expense by the number of months remaining in the current certification period, based on when the expenses was verified and when the change can be effected to obtain a monthly figure.
Example: Mr. Reaves reports a $1,500 doctor bill on March 18. He is currently certified from January through June. Mr. Reaves provides verification of the bill and an insurance reimbursement of $100, on March 30. He wants the $1,400 balance prorated.
Revise Mr. Reaves food stamp budget, effective with his May issuance, allowing him a $665 medical deduction for May and June ($1,400 – 2 = $700 minus $35 monthly exclusion = $665.