Document disjoint health premium inputs and correct consumer treatment

changelog.d/hub-premium-input-contract-1010.fixed.md

@@ -0,0 +1 @@
+Document disjoint pretax and non-pretax health premium inputs, include employee-paid pretax premiums in applicable benefit and New Jersey medical deductions, exclude pretax premiums from SSI wages and North Dakota renter-refund income. Preserve Minnesota Supplemental Aid gross income for eligibility and guardian fees while applying SSI salary-reduction exclusions to countable income.

policyengine_us/tests/core/test_premium_input_contract.py

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+"""Premium payment methods are disjoint inputs with consumer-specific treatment.
+
+Moving employee-paid premiums from non-pretax payments to pretax payroll
+deductions leaves total medical spending unchanged. SNAP, HUD,
+child-care deductions, Orange County General Relief and New Jersey
+medical expenses count both payment methods. Michigan's wage exclusion
+and non-pretax premium deduction likewise leave household resources unchanged
+with other benefit amounts held fixed.
+North Dakota excludes pretax premiums from income and deducts non-pretax
+premiums as medical expenses, also leaving renters' refund income unchanged.
+
+Federal taxable and FICA wages, ACA/Medicaid MAGI, and tax deductions that
+exclude pretax premiums distinguish the payment methods. SSI also excludes
+qualified salary-reduction premiums from wages before its earned-income
+disregard. The SGA work-earnings test retains payroll premium deductions.
+Program premiums and
+eligibility are held fixed here: changing MAGI can otherwise legitimately change
+Marketplace, CHIP or Medicaid premiums, obscuring the spending invariant.
+
+Each generated batch uses fresh vectorized simulations across several states;
+no calculated arrays are shared between the two situations or across examples.
+"""
+
+import numpy as np
+from hypothesis import HealthCheck, example, given, settings
+from hypothesis import strategies as st
+
+from policyengine_us import Simulation
+from policyengine_us.system import system
+
+
+YEAR = 2026
+MONTH = "2026-01"
+STATES = ("CA", "MO", "PA", "NJ", "OH", "MI", "ND")
+
+
+@st.composite
+def premium_transfers(draw):
+    total = draw(st.integers(0, 12_000))
+    pretax = draw(st.integers(0, total))
+    transfer = draw(st.integers(0, total - pretax))
+    return total, pretax, transfer
+
+
+def _situation(batch, moved):
+    people = {}
+    tax_units = {}
+    spm_units = {}
+    households = {}
+    marital_units = {}
+    for row, (total, initial_pretax, transfer) in enumerate(batch):
+        pretax = initial_pretax + (transfer if moved else 0)
+        non_pretax = total - pretax
+        for state, size in ((state, size) for state in STATES for size in (1, 2)):
+            key = f"{state}_{size}_{row}"
+            people[key] = {
+                "age": {YEAR: 40},
+                "is_tax_unit_head": {YEAR: True},
+                "is_ssi_aged_blind_disabled": {YEAR: True},
+                "employment_income": {YEAR: 250_000},
+                "pre_tax_health_insurance_premiums": {YEAR: pretax},
+                # These are alternative representations used by different
+                # consumers, not additive premiums within the non-pretax set.
+                "health_insurance_premiums": {YEAR: non_pretax},
+                "health_insurance_premiums_without_medicare_part_b": {YEAR: non_pretax},
+                "other_health_insurance_premiums": {YEAR: non_pretax},
+                "other_medical_expenses": {YEAR: 300},
+                "over_the_counter_health_expenses": {YEAR: 100},
+                "medicare_enrolled": {YEAR: False},
+                "is_medicare_eligible": {YEAR: False},
+                "medicare_part_a_premium": {YEAR: 0},
+                "medicare_part_b_premium": {YEAR: 0},
+                "income_adjusted_part_d_premium_surcharge": {YEAR: 0},
+                "employer_sponsored_insurance_premiums": {YEAR: 0},
+                "self_employed_health_insurance_ald_person": {YEAR: 0},
+                "general_assistance": {YEAR: 0},
+                # Hold other benefits fixed for the Michigan invariant.
+                "ssi": {YEAR: 0},
+                "ca_oc_general_relief_countable_earned_income": {MONTH: 5_000},
+                "ca_oc_general_relief_gross_unearned_income": {MONTH: 0},
+                "ca_oc_general_relief_receives_other_cash_assistance": {MONTH: False},
+            }
+            members = [key]
+            if size == 2:
+                spouse = f"{key}_spouse"
+                people[spouse] = {
+                    **people[key],
+                    "is_tax_unit_head": {YEAR: False},
+                    "is_tax_unit_spouse": {YEAR: True},
+                }
+                members.append(spouse)
+            marital_units[key] = {"members": members}
+            tax_units[key] = {
+                "members": members,
+                "chip_premium": {YEAR: 0},
+                "medicaid_premium": {YEAR: 0},
+                "marketplace_net_premium": {YEAR: 0},
+                "above_the_line_deductions": {YEAR: 0},
+                "self_employed_health_insurance_ald": {YEAR: 0},
+                "dependents_self_employed_health_insurance_ald": {YEAR: 0},
+                "medical_expense_deduction": {YEAR: 0},
+                "tax_unit_itemizes": {YEAR: False},
+                "taxable_income": {YEAR: 300_000},
+                "nj_agi": {YEAR: 50_000},
+                "oh_employer_subsidized_health_plan_eligible": {YEAR: True},
+            }
+            spm_units[key] = {
+                "members": members,
+                "tanf": {YEAR: 0},
+                "mo_ccs_countable_income": {MONTH: 5_000},
+                "pa_ccw_countable_income": {YEAR: 60_000},
+                "pa_ccw_stepparent_deduction": {MONTH: 0},
+            }
+            households[key] = {
+                "members": members,
+                "state_code": {YEAR: state},
+                "in_oc": {YEAR: state == "CA"},
+            }
+    return {
+        "people": people,
+        "tax_units": tax_units,
+        "spm_units": spm_units,
+        "households": households,
+        "marital_units": marital_units,
+        "families": {
+            key: {"members": unit["members"]} for key, unit in marital_units.items()
+        },
+    }
+
+
+@settings(
+    max_examples=8,
+    deadline=None,
+    suppress_health_check=[HealthCheck.too_slow],
+)
+@example(batch=[(0, 0, 0), (12_000, 0, 12_000), (12_000, 6_000, 6_000)])
+@example(batch=[(12_000, 12_000, 0), (1, 0, 1)])
+@given(batch=st.lists(premium_transfers(), min_size=1, max_size=3))
+def test_premium_transfer_respects_each_consumers_tax_treatment(batch):
+    # Each batch contains both single adults and two-person married units.
+    # Reusing the reference system avoids rebuilding the country per example.
+    baseline = Simulation(situation=_situation(batch, False), tax_benefit_system=system)
+    moved = Simulation(situation=_situation(batch, True), tax_benefit_system=system)
+    sizes = np.tile((1, 2), len(batch) * len(STATES))
+    transfer = np.repeat([row[2] for row in batch], len(STATES) * 2)
+    total = np.repeat([row[0] for row in batch], len(STATES) * 2) * sizes
+    states = np.tile(np.repeat(STATES, 2), len(batch))
+    person_transfer = np.repeat(transfer, sizes)
+    person_states = np.repeat(states, sizes)
+    unit_transfer = transfer * sizes
+
+    np.testing.assert_allclose(
+        baseline.calculate("spm_unit_medical_out_of_pocket_expenses", YEAR),
+        total + 400 * sizes,
+        rtol=0,
+        atol=0.02,
+    )
+    # North Dakota starts from raw market wages, excludes the pretax
+    # contribution once, and deducts only the remaining medical expenses.
+    np.testing.assert_allclose(
+        baseline.calculate("nd_renters_refund_income", YEAR),
+        (250_000 * sizes - total - 300 * sizes) * (states == "ND"),
+        rtol=0,
+        atol=0.02,
+    )
+
+    invariant_consumers = (
+        ("spm_unit_health_insurance_premiums", YEAR),
+        ("spm_unit_medical_out_of_pocket_expenses", YEAR),
+        ("snap_allowable_medical_expenses", YEAR),
+        ("hud_medical_expenses", YEAR),
+        ("mo_ccs_adjusted_income", MONTH),
+        ("pa_ccw_medical_expenses", YEAR),
+        ("pa_ccw_adjusted_income", YEAR),
+        ("ca_oc_general_relief_countable_income_person", MONTH),
+        ("nj_medical_expense_deduction", YEAR),
+        ("mi_household_resources", YEAR),
+        ("nd_renters_refund_income", YEAR),
+        ("ssi_engaged_in_sga", YEAR),
+    )
+    for variable, period in invariant_consumers:
+        np.testing.assert_allclose(
+            moved.calculate(variable, period),
+            baseline.calculate(variable, period),
+            rtol=0,
+            atol=0.02,
+            err_msg=variable,
+        )
+
+    tax_status_sensitive_consumers = (
+        "irs_employment_income",
+        "payroll_tax_gross_wages",
+        "ssi_earned_income",
+        "adjusted_gross_income",
+        "aca_magi",
+        "medicaid_magi",
+        "medicaid_magi_person",
+        "medical_expense_health_insurance_premiums",
+        "medicaid_medically_needy_medical_expenses",
+    )
+    for variable in tax_status_sensitive_consumers:
+        np.testing.assert_allclose(
+            baseline.calculate(variable, YEAR) - moved.calculate(variable, YEAR),
+            person_transfer
+            if system.variables[variable].entity.key == "person"
+            else unit_transfer,
+            rtol=0,
+            atol=0.02,
+            err_msg=variable,
+        )
+
+    # These categorically eligible individuals remain above the earned-income
+    # exclusions. SSI's 50% earned-income disregard halves the wage change.
+    np.testing.assert_allclose(
+        baseline.calculate("ssi_countable_income", YEAR)
+        - moved.calculate("ssi_countable_income", YEAR),
+        person_transfer / 2,
+        rtol=0,
+        atol=0.02,
+    )
+
+    for variable, state in (
+        ("oh_insured_unreimbursed_medical_care_expense_amount", "OH"),
+        ("mo_qualified_health_insurance_premiums", "MO"),
+    ):
+        np.testing.assert_allclose(
+            baseline.calculate(variable, YEAR) - moved.calculate(variable, YEAR),
+            person_transfer * (person_states == state),
+            rtol=0,
+            atol=0.02,
+            err_msg=variable,
+        )

policyengine_us/tests/policy/baseline/gov/hhs/medicaid/eligibility/categories/medically_needy/medicaid_medically_needy_medical_expenses.yaml

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+- name: SSI-based spenddown expenses do not repeat the pretax wage exclusion.
+  period: 2026
+  input:
+    health_insurance_premiums: 1_800
+    pre_tax_health_insurance_premiums: 2_400
+    other_medical_expenses: 300
+    medicare_enrolled: false
+  output:
+    medicaid_medically_needy_medical_expenses: 2_100
+
+- name: SSI-based spenddown retains decomposed non-pretax Medicare premiums.
+  period: 2026
+  input:
+    health_insurance_premiums_without_medicare_part_b: 600
+    medicare_part_b_premium: 1_200
+    medicare_enrolled: true
+    pre_tax_health_insurance_premiums: 2_400
+    other_medical_expenses: 300
+  output:
+    medicaid_medically_needy_medical_expenses: 2_100
+
+- name: Kansas spenddown does not deduct pretax premiums again from countable income.
+  period: 2026
+  input:
+    age: 65
+    is_in_medicaid_medically_needy_category: true
+    is_adult_for_medicaid: false
+    is_optional_senior_or_disabled_for_medicaid: false
+    # Isolate spenddown from the separate SSI-recipient Medicaid pathway.
+    is_ssi_recipient_for_medicaid: false
+    employment_income: 27_020
+    ssi_countable_resources: 1_000
+    state_code: KS
+    health_insurance_premiums: 2_000
+    pre_tax_health_insurance_premiums: 4_000
+    medicare_enrolled: false
+  output:
+    # (27,020 - 4,000 - 12 * (20 + 65)) / 2 = 11,000.
+    is_ssi_aged_blind_disabled: true
+    ssi_earned_income: 23_020
+    ssi_countable_income: 11_000
+    medicaid_medically_needy_medical_expenses: 2_000
+    is_ssi_recipient_for_medicaid: false
+    is_medically_needy_for_medicaid: false

policyengine_us/tests/policy/baseline/gov/hhs/medicaid/income/deemed/from_ineligible_parent/medicaid_optional_senior_or_disabled_unearned_income_deemed_from_ineligible_parent.yaml

@@ -19,6 +19,50 @@
   output:
     medicaid_optional_senior_or_disabled_unearned_income_deemed_from_ineligible_parent: [6_006, 0]
 
+- name: Optional Medicaid parental deeming inherits the SSI exclusion for qualified pretax premiums.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      recipient:
+        age: 12
+        is_ssi_disabled: true
+      sibling:
+        age: 14
+        employment_income: 2_400
+        pre_tax_health_insurance_premiums: 1_200
+      parent:
+        age: 40
+        is_parent: true
+        employment_income: 36_000
+        pre_tax_health_insurance_premiums: 3_600
+    tax_units:
+      tax_unit:
+        members: [recipient, sibling, parent]
+    # A parent and children are not a married couple. Explicit singleton
+    # units prevent default grouping from also applying spousal deeming.
+    marital_units:
+      recipient_unit:
+        members: [recipient]
+      sibling_unit:
+        members: [sibling]
+      parent_unit:
+        members: [parent]
+    households:
+      household:
+        members: [recipient, sibling, parent]
+        state_code: NC
+  output:
+    # 42 USC 1396a(m) uses SSI methodology for this optional pathway.
+    # POMS SI 00820.102C.2: parent wages 32,400; sibling wages 1,200.
+    # 20 CFR 416.1165(b), (d): sibling allocation = 4,596, so
+    # (32,400 - 4,596 - 20 * 12 - 65 * 12) / 2 - 967 * 12 = 1,788 deemed.
+    # Under (e)(1), apply child's general exclusion: 1,788 - 20 * 12 = 1,548.
+    medicaid_optional_senior_or_disabled_unearned_income_deemed_from_ineligible_parent: [1_788, 0, 0]
+    is_ssi_spousal_deeming_applies: [false, false, false]
+    medicaid_optional_senior_or_disabled_income_deemed_from_ineligible_spouse: [0, 0, 0]
+    medicaid_optional_senior_or_disabled_countable_income: [1_548, 0, 0]
+
 # Missouri MHDC deems only a natural or adoptive parent's income, never a
 # stepparent's (DSS MHABD Manual § 0805.020.15), and divides the deemed
 # amount equally among the disabled children applying. Parent status

policyengine_us/tests/policy/baseline/gov/hhs/medicaid/income/deemed/from_ineligible_spouse/medicaid_optional_senior_or_disabled_income_deemed_from_ineligible_spouse.yaml

@@ -84,3 +84,39 @@
     # 1,450 - 20 = 1,430 monthly, or 17,160 annually.
     medicaid_optional_senior_or_disabled_countable_income: 17_160
     is_optional_senior_or_disabled_income_eligible: false
+
+- name: Optional Medicaid spouse deeming inherits the SSI exclusion for qualified pretax premiums.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      recipient:
+        age: 70
+        is_tax_unit_head: true
+      spouse:
+        age: 60
+        is_tax_unit_spouse: true
+        employment_income: 24_000
+        pre_tax_health_insurance_premiums: 2_400
+      child:
+        age: 14
+        employment_income: 2_400
+        pre_tax_health_insurance_premiums: 1_200
+    tax_units:
+      tax_unit:
+        members: [recipient, spouse, child]
+    marital_units:
+      marital_unit:
+        members: [recipient, spouse]
+    households:
+      household:
+        members: [recipient, spouse, child]
+        state_code: NC
+  output:
+    # 42 USC 1396a(m) uses SSI methodology for this optional pathway.
+    # POMS SI 00820.102C.2: spouse wages 21,600; child wages 1,200.
+    # 20 CFR 416.1163(b), (d): allocation = (1,450 - 967) * 12
+    # - 1,200 = 4,596; remaining spouse wages = 17,004 > 5,796.
+    # (17,004 - 20 * 12 - 65 * 12) / 2 = 7,992 deemed and countable.
+    medicaid_optional_senior_or_disabled_income_deemed_from_ineligible_spouse: [7_992, 0, 0]
+    medicaid_optional_senior_or_disabled_countable_income: [7_992, 0, 0]