Project Medicaid LTC home equity limits with CMS's rounded CPI-U increase

changelog.d/fix-home-equity-limit-projection.fixed.md

@@ -0,0 +1 @@
+Project the Medicaid long-term care home equity limits with CMS's method (the September-to-September CPI-U increase rounded to 0.1%, effective each January 1) instead of stepping the agricultural limit each February 1, drop their unpublished 2027 and 2028 values, and correct the CMS bulletin citations.

policyengine_us/parameters/gov/bls/cpi/cpi_u_nsa_september.yaml

@@ -0,0 +1,18 @@
+description: The Bureau of Labor Statistics publishes this September value of the Consumer Price Index for All Urban Consumers, not seasonally adjusted, from which CMS takes the September-to-September percentage change it applies to the Medicaid long-term care home equity limits.
+values:
+  # BLS series CUUR0000SA0 (U.S. city average, all items, 1982-84=100).
+  2018-09-01: 252.439
+  2019-09-01: 256.759
+  2020-09-01: 260.28
+  2021-09-01: 274.31
+  2022-09-01: 296.808
+  2023-09-01: 307.789
+  2024-09-01: 315.301
+  2025-09-01: 324.8
+metadata:
+  unit: currency-USD
+  label: CPI-U, not seasonally adjusted, September
+  economy: false
+  reference:
+    - title: BLS | CPI-U, U.S. city average, all items, not seasonally adjusted (CUUR0000SA0)
+      href: https://data.bls.gov/timeseries/CUUR0000SA0

policyengine_us/parameters/gov/hhs/medicaid/eligibility/long_term_care/home_equity/agricultural_limit.yaml

@@ -2,26 +2,25 @@ description: The Department of Health and Human Services limits agricultural hom
 values:
   2025-01-01: 1_097_000
   2026-01-01: 1_130_000
-  2027-01-01: 1_159_000
-  2028-01-01: 1_189_000
 
 metadata:
   unit: currency-USD
   period: year
   label: Medicaid long-term care agricultural home equity limit
-  uprating:
-    parameter: gov.bls.cpi.cpi_u
-    rounding:
-      type: nearest
-      interval: 1_000
+  # Years after the last CMS-published value are projected in
+  # parameters/uprating_extensions.py (extend_medicaid_home_equity_limits) by
+  # CMS's method under 42 USC 1396p(f)(1)(C): the prior year's limit times the
+  # September-to-September CPI-U increase rounded to 0.1%, then rounded to the
+  # nearest $1,000, effective January 1. P.L. 119-21 section 71108 exempts this
+  # limit from the $1,000,000 cap on other homes from 2028.
   reference:
-    - title: Updated 2025 SSI and Spousal Impoverishment Standards
-      href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib05282025.pdf
-    - title: 2026 SSI, Spousal Impoverishment, and Medicare Savings Program Resource Standards
-      href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib04272026.pdf
-    - title: CMCS Informational Bulletin, Dec. 9, 2025
+    - title: Updated 2025 SSI and Spousal Impoverishment Standards, CMCS Informational Bulletin, May 28, 2025
+      href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib05282025.pdf#page=2
+    - title: Updated 2026 SSI and Spousal Impoverishment Standards, CMCS Informational Bulletin, April 27, 2026
+      href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib04272026.pdf#page=2
+    - title: 2026 SSI, Spousal Impoverishment, and Medicare Savings Program Resource Standards, CMCS Informational Bulletin, December 9, 2025
       href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib12092025.pdf#page=3
-    - title: CMCS Informational Bulletin, Nov. 18, 2025
-      href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib11182025.pdf#page=8
+    - title: CMCS Informational Bulletin, November 18, 2025, Section 71108 - Revising Home Equity Limit
+      href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib11182025.pdf#page=9
     - title: H.R. 1, 119th Congress, Sec. 71108 - Revising home equity limit for determining eligibility for long-term care services under the Medicaid program
       href: https://www.congress.gov/bill/119th-congress/house-bill/1/text

policyengine_us/parameters/gov/hhs/medicaid/eligibility/long_term_care/home_equity/limit.yaml

@@ -2,19 +2,23 @@ description: The Department of Health and Human Services limits non-agricultural
 values:
   2025-01-01: 1_097_000
   2026-01-01: 1_130_000
-  2027-01-01: 1_159_000
+  # CMS has not published 2027 standards. Until then 2027 is projected in
+  # parameters/uprating_extensions.py (extend_medicaid_home_equity_limits) as
+  # the indexed maximum, which equals the agricultural limit before 2028.
   2028-01-01: 1_000_000
 
 metadata:
   unit: currency-USD
   period: year
   label: Medicaid long-term care non-agricultural home equity limit
   reference:
-    - title: Updated 2025 SSI and Spousal Impoverishment Standards
-      href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib05282025.pdf
-    - title: 2026 SSI, Spousal Impoverishment, and Medicare Savings Program Resource Standards
-      href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib04272026.pdf
+    - title: Updated 2025 SSI and Spousal Impoverishment Standards, CMCS Informational Bulletin, May 28, 2025
+      href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib05282025.pdf#page=2
+    - title: Updated 2026 SSI and Spousal Impoverishment Standards, CMCS Informational Bulletin, April 27, 2026
+      href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib04272026.pdf#page=2
+    - title: 42 USC 1396p(f)(1)(C) - Annual CPI-U indexing of the home equity limits
+      href: https://www.law.cornell.edu/uscode/text/42/1396p#f_1
     - title: H.R. 1, 119th Congress, Sec. 71108 - Revising home equity limit for determining eligibility for long-term care services under the Medicaid program
       href: https://www.congress.gov/bill/119th-congress/house-bill/1/text
-    - title: CMCS Informational Bulletin, Nov. 18, 2025
-      href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib11182025.pdf#page=8
+    - title: CMCS Informational Bulletin, November 18, 2025, Section 71108 - Revising Home Equity Limit
+      href: https://www.medicaid.gov/federal-policy-guidance/downloads/cib11182025.pdf#page=9

policyengine_us/parameters/uprating_extensions.py

@@ -571,6 +571,105 @@ def extend_la_cpi_u_indexed_amounts(parameters: ParameterNode, end_year: int) ->
         )
 
 
+def get_cms_cpi_u_percentage_increase(cpi: ParameterNode, year: int) -> float:
+    """The CPI-U percentage increase CMS applies to ``year``'s home equity limits.
+
+    42 USC 1396p(f)(1)(C) increases the Medicaid long-term care home equity
+    limits "from year to year based on the percentage increase in the consumer
+    price index for all urban consumers ... rounded to the nearest $1,000".
+    CMS's annual SSI and spousal impoverishment bulletins report a "CPI
+    Increase" for each year to one decimal place: 1.7% for 2020, 1.4% for
+    2021, 5.4% for 2022, 2.4% for 2025 and 3.0% for 2026. Each is the
+    September-to-September change in the not seasonally adjusted CPI-U ending
+    the September before the year, rounded to one decimal place. CMS applies
+    the rounded percentage: $893,000 x 1.014 = $905,502 became the published
+    2021 maximum of $906,000, where the unrounded 1.371% would give $905,000.
+    A fall in the index is not an increase, so the percentage is never
+    negative.
+
+    ``cpi`` is the ``gov.bls.cpi`` node. The published Septembers in
+    ``cpi_u_nsa_september`` are used when both are available. Otherwise both
+    Septembers come from the model's CPI-U series (seasonally adjusted from
+    January 2024) through ``get_projected_cpi_u_for_month``, so the two are
+    never mixed.
+    """
+    september = cpi.cpi_u_nsa_september
+    published = {int(value.instant_str[:4]) for value in september.values_list}
+    if {year - 2, year - 1} <= published:
+        current = september(f"{year - 1}-09-01")
+        prior = september(f"{year - 2}-09-01")
+    else:
+        current = get_projected_cpi_u_for_month(cpi.cpi_u, instant(f"{year - 1}-09-01"))
+        prior = get_projected_cpi_u_for_month(cpi.cpi_u, instant(f"{year - 2}-09-01"))
+    change = 100 * (Decimal(repr(current)) / Decimal(repr(prior)) - 1)
+    percentage = change.quantize(Decimal("0.1"), rounding=ROUND_HALF_UP)
+    return float(max(percentage, 0))
+
+
+def adjust_home_equity_limit_for_inflation(
+    prior_amount: float, percentage: float
+) -> float:
+    """Apply a 42 USC 1396p(f)(1)(C) increase, rounded to the nearest $1,000."""
+    adjusted = Decimal(str(prior_amount)) * (100 + Decimal(str(percentage))) / 100
+    thousands = (adjusted / 1_000).quantize(Decimal(1), rounding=ROUND_HALF_UP)
+    return float(thousands * 1_000)
+
+
+# P.L. 119-21 section 71108(c): the $1,000,000 cap on non-agricultural homes
+# applies beginning January 1, 2028.
+HOME_EQUITY_NON_AGRICULTURAL_CAP_START_YEAR = 2028
+
+
+def extend_medicaid_home_equity_limits(
+    parameters: ParameterNode, end_year: int
+) -> None:
+    """Project the CPI-indexed Medicaid long-term care home equity limits.
+
+    Each year after the last CMS-published value, the agricultural home
+    equity limit becomes the prior year's limit increased by that year's
+    CPI-U percentage (see ``get_cms_cpi_u_percentage_increase``), rounded to
+    the nearest $1,000, effective January 1. Before P.L. 119-21 section 71108
+    caps other homes at $1,000,000 beginning in 2028, the agricultural and
+    non-agricultural limits are the same indexed maximum, so each year before
+    the cap with no non-agricultural value in the YAML takes the agricultural
+    projection. Amounts encoded in the YAML take precedence for their own
+    years.
+
+    Like the other projections in this module, the values are fixed when the
+    parameter tree is built.
+    """
+    home_equity = parameters.gov.hhs.medicaid.eligibility.long_term_care.home_equity
+    cpi = parameters.gov.bls.cpi
+    agricultural = home_equity.agricultural_limit
+    first_projected_year = 1 + max(
+        int(value.instant_str[:4]) for value in agricultural.values_list
+    )
+    for year in range(first_projected_year, end_year + 1):
+        agricultural.update(
+            period=f"year:{year}-01-01:1",
+            value=adjust_home_equity_limit_for_inflation(
+                agricultural(f"{year - 1}-01-01"),
+                get_cms_cpi_u_percentage_increase(cpi, year),
+            ),
+        )
+    agricultural.update(
+        start=instant(f"{end_year}-01-01"),
+        value=agricultural(f"{end_year}-01-01"),
+    )
+    non_agricultural = home_equity.limit
+    encoded_years = {
+        int(value.instant_str[:4]) for value in non_agricultural.values_list
+    }
+    for year in range(
+        min(encoded_years) + 1, HOME_EQUITY_NON_AGRICULTURAL_CAP_START_YEAR
+    ):
+        if year not in encoded_years:
+            non_agricultural.update(
+                period=f"year:{year}-01-01:1",
+                value=agricultural(f"{year}-01-01"),
+            )
+
+
 def extend_wa_millionaires_standard_deduction(
     parameters: ParameterNode,
     end_year: int,
@@ -1036,6 +1135,9 @@ def set_all_uprating_parameters(parameters: ParameterNode) -> ParameterNode:
     # above so projected Decembers are available.
     extend_la_cpi_u_indexed_amounts(parameters, end_year=END_YEAR)
 
+    # Medicaid long-term care home equity limits, CMS's rounded CPI-U method
+    extend_medicaid_home_equity_limits(parameters, end_year=END_YEAR)
+
     # The limits on a dependent's standard deduction follow 26 U.S.C.
     # 63(c)(4)'s chained CPI-U schedule, computed from the statutory 1987 and
     # 1997 bases. Must run after the Chained CPI-U extension above so

policyengine_us/tests/core/test_medicaid_home_equity_limit_indexing.py

@@ -0,0 +1,188 @@
+"""Projection of the Medicaid long-term care home equity limits.
+
+42 USC 1396p(f)(1)(C) increases the limits from year to year by CPI-U,
+rounded to the nearest $1,000. ``extend_medicaid_home_equity_limits`` projects
+them the way CMS computes them. These tests check that method against CMS's
+published bulletins, then check the projected parameter values.
+
+Published figures (CMS SSI and spousal impoverishment bulletins, chart page):
+2020 cib062420-new p.2, 2021 cib060421 p.2, 2022 cib06022022_0 p.2,
+2025 cib05282025 p.2, 2026 cib04272026 p.2.
+"""
+
+from types import SimpleNamespace
+
+import pytest
+
+from policyengine_us import Simulation
+from policyengine_core.parameters import ParameterNode
+
+from policyengine_us.parameters.uprating_extensions import (
+    adjust_home_equity_limit_for_inflation,
+    extend_medicaid_home_equity_limits,
+    get_cms_cpi_u_percentage_increase,
+)
+from policyengine_us.system import system
+
+CPI = system.parameters.gov.bls.cpi
+HOME_EQUITY = system.parameters.gov.hhs.medicaid.eligibility.long_term_care.home_equity
+
+# "CPI Increase for <year>" in each bulletin's chart.
+PUBLISHED_CPI_INCREASE = {2020: 1.7, 2021: 1.4, 2022: 5.4, 2025: 2.4, 2026: 3.0}
+# (minimum, maximum) home equity limits in each bulletin's chart.
+PUBLISHED_LIMITS = {
+    2020: (595_000, 893_000),
+    2021: (603_000, 906_000),
+    2022: (636_000, 955_000),
+    2025: (730_000, 1_097_000),
+    2026: (752_000, 1_130_000),
+}
+
+
+@pytest.mark.parametrize("year, percentage", PUBLISHED_CPI_INCREASE.items())
+def test_cpi_increase_matches_cms(year, percentage):
+    assert get_cms_cpi_u_percentage_increase(CPI, year) == percentage
+
+
+@pytest.mark.parametrize("start, end", [(2020, 2021), (2021, 2022), (2022, 2025)])
+@pytest.mark.parametrize("bound", [0, 1])
+def test_year_to_year_increases_reproduce_cms_limits(start, end, bound):
+    # 2021 separates the methods: $893,000 x 1.014 rounds to $906,000, while
+    # the unrounded 1.371% increase would give $905,000. 2022 -> 2025 chains
+    # through 2023 and 2024, whose bulletins are not cited here.
+    limit = PUBLISHED_LIMITS[start][bound]
+    for year in range(start + 1, end + 1):
+        limit = adjust_home_equity_limit_for_inflation(
+            limit, get_cms_cpi_u_percentage_increase(CPI, year)
+        )
+    assert limit == PUBLISHED_LIMITS[end][bound]
+
+
+class _Series:
+    """A minimal stand-in for a dated CPI parameter."""
+
+    def __init__(self, values):
+        self.values = values
+        self.values_list = [SimpleNamespace(instant_str=date) for date in values]
+
+    def __call__(self, date):
+        return self.values[date]
+
+
+@pytest.mark.parametrize("current, percentage", [(99.0, 0), (101.0, 1.0)])
+def test_a_falling_index_is_not_an_increase(current, percentage):
+    cpi = SimpleNamespace(
+        cpi_u_nsa_september=_Series({"2030-09-01": 100.0, "2031-09-01": current}),
+        cpi_u=None,
+    )
+    assert get_cms_cpi_u_percentage_increase(cpi, 2032) == percentage
+
+
+def test_published_limits_are_parameter_values():
+    for year in (2025, 2026):
+        assert HOME_EQUITY.limit(f"{year}-01-01") == PUBLISHED_LIMITS[year][1]
+        assert (
+            HOME_EQUITY.agricultural_limit(f"{year}-01-01")
+            == (PUBLISHED_LIMITS[year][1])
+        )
+
+
+def test_agricultural_limit_is_projected_year_to_year_on_january_1():
+    for year in range(2027, 2041):
+        current = HOME_EQUITY.agricultural_limit(f"{year}-01-01")
+        assert current == adjust_home_equity_limit_for_inflation(
+            HOME_EQUITY.agricultural_limit(f"{year - 1}-01-01"),
+            get_cms_cpi_u_percentage_increase(CPI, year),
+        )
+        for month in ["02", "07", "12"]:
+            assert HOME_EQUITY.agricultural_limit(f"{year}-{month}-01") == current
+
+
+def test_non_agricultural_limit_is_the_indexed_maximum_until_the_2028_cap():
+    assert HOME_EQUITY.limit("2027-01-01") == HOME_EQUITY.agricultural_limit(
+        "2027-01-01"
+    )
+    for year in range(2028, 2041):
+        assert HOME_EQUITY.limit(f"{year}-01-01") == 1_000_000
+        assert HOME_EQUITY.agricultural_limit(f"{year}-01-01") > 1_000_000
+
+
+def test_chassis_screen_reads_each_years_agricultural_limit():
+    # The projected limits move with the CPI-U forecast, so the boundaries are
+    # read from the parameters rather than written into a YAML case.
+    limit_2028 = HOME_EQUITY.agricultural_limit("2028-01-01")
+    limit_2029 = HOME_EQUITY.agricultural_limit("2029-01-01")
+    assert limit_2029 > limit_2028
+    equity = {"above_2028_limit": limit_2028 + 1, "at_limit": limit_2029}
+    equity["above_limit"] = limit_2029 + 1
+    people = {
+        name: {
+            "receives_medicaid_long_term_care_services": {"2029": True},
+            "home_is_on_agricultural_land": {"2029": True},
+            "home_equity": {"2029": value},
+        }
+        for name, value in equity.items()
+    }
+    situation = {"people": people}
+    for group in ["tax_units", "spm_units", "families", "marital_units", "households"]:
+        situation[group] = {f"{name}_{group}": {"members": [name]} for name in people}
+    simulation = Simulation(situation=situation)
+    eligible = simulation.calculate(
+        "is_medicaid_long_term_care_home_equity_eligible", 2029
+    )
+    assert eligible.tolist() == [True, True, False]
+
+
+@pytest.mark.parametrize("agricultural_published_through", [2026, 2027])
+def test_non_agricultural_fill_follows_its_own_coverage(
+    agricultural_published_through,
+):
+    # Publishing the 2027 agricultural limit before the non-agricultural one
+    # must not leave the non-agricultural 2027 limit at its 2026 value.
+    agricultural = {"2025-01-01": 1_097_000, "2026-01-01": 1_130_000}
+    if agricultural_published_through == 2027:
+        agricultural["2027-01-01"] = 1_164_000
+    non_agricultural = {
+        "2025-01-01": 1_097_000,
+        "2026-01-01": 1_130_000,
+        "2028-01-01": 1_000_000,
+    }
+    septembers = {
+        f"{year}-09-01": 100 * 1.03 ** (year - 2024) for year in range(2024, 2031)
+    }
+    parameters = ParameterNode(
+        data={
+            "gov": {
+                "hhs": {
+                    "medicaid": {
+                        "eligibility": {
+                            "long_term_care": {
+                                "home_equity": {
+                                    "agricultural_limit": {"values": agricultural},
+                                    "limit": {"values": non_agricultural},
+                                }
+                            }
+                        }
+                    }
+                },
+                "bls": {
+                    "cpi": {
+                        "cpi_u_nsa_september": {"values": septembers},
+                        "cpi_u": {"values": septembers},
+                    }
+                },
+            }
+        }
+    )
+    extend_medicaid_home_equity_limits(parameters, end_year=2030)
+    home_equity = parameters.gov.hhs.medicaid.eligibility.long_term_care.home_equity
+    assert home_equity.limit("2027-01-01") == home_equity.agricultural_limit(
+        "2027-01-01"
+    )
+    assert home_equity.limit("2027-01-01") > 1_130_000
+    assert home_equity.limit("2028-01-01") == 1_000_000
+    assert home_equity.agricultural_limit(
+        "2028-01-01"
+    ) == adjust_home_equity_limit_for_inflation(
+        home_equity.agricultural_limit("2027-01-01"), 3.0
+    )