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What Is Medicaid Spend Down?

Medicaid Spend Down can appear confusing initially. It’s about aligning your income, assets, and medical bills with Medicaid’s criteria. While its details might seem overwhelming, understanding is within reach. 

This guide will clarify which expenses count, how to determine eligibility, and the necessary steps to follow.

Key Takeaways

  • The Medicaid Spend Down program allows those with income levels above Medicaid limits to qualify by subtracting certain medical expenses.
  • Qualifying Spend Down eligibility varies based on income, medical services and costs, and state guidelines.
  • Spend Down operates in two forms: income-based and asset-based, with amounts set by state limits.
  • Deductible expenses include hospital stays, home care, doctor visits, prescription drugs, and more, though details differ by state.

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What Is Medicaid Spend Down?

A Medicaid Spend Down is a process allowing individuals with high medical costs but whose income or assets are slightly over the Medicaid eligibility threshold to qualify for Medicaid. Think of it as meeting a deductible for insurance.

Suppose you have income or assets that exceed the Medicaid limit. In that case, you can “spend down,” or subtract, your medical expenses from your income or assets to become eligible. It’s like a balance; your income is on one side of the scale, and your medical expenses are on the other.

By spending down, you’re essentially lowering your “excess income” on the scale to qualify for Medicaid. Remember, each state has its guidelines (e.g., New York) and eligibility criteria, so it’s important to check with your local Medicaid office or a trusted advisor to understand the specifics.

Can Anyone Qualify for a Spend Down?

Medicaid Spend Down isn’t for everyone. It has certain criteria, which can vary depending on where you live. Here’s a clearer picture:

  • Age: If you’re either below 21 years or above 65 years, you’re on the list.
  • Health Condition: Those who are blind or have other disabilities are included.
  • Family Circumstances: Families where one or both parents are missing, no longer alive, facing disabilities, or aren’t working can also be eligible.

Wondering if you fit the bill? If you’ve tried for a Medicaid application and didn’t get full coverage, you’ll get a message from your local social services department. This message will clarify whether a spend down option is available for you and, if so, the exact medical expenses you’d need to cover to get Medicaid benefits.

How Does Medicaid Spend Down Work?

A Medicaid Spend Down works in two ways, depending on your state and individual circumstances: 

  1. Income-based 
  2. Asset-based

In an income-based spend down, you subtract your medical expenses from your monthly income. You’ll qualify for Medicaid for the month if the remainder is below your state’s Medicaid income limit.

Let’s say you have a monthly income of $1,200, medical expenses of $400, and your state’s income limit is $800. After subtracting your medical expenses, your adjusted income is $800, making you eligible for Medicaid.

On the other hand, you subtract your medical expenses from your assets in an asset-based spend. 

If the remaining amount is below your state’s asset limit, you’ll qualify for Medicaid. For example, if you have $3,000 in assets and $1,000 in medical expenses, and your state’s asset limit is $2,000, your adjusted assets would be $2,000, making you eligible.

It’s crucial to remember that these calculations are simplified examples. It’s best to seek advice from your local Medicaid office or a trusted advisor who can help navigate the specifics of your situation.

Types of Medical Expenses That Count Toward a Spend Down

Several types of medical expenses can count towards a Medicaid Spend Down. These include both medical and remedial care recognized under state law, even if Medicaid doesn’t cover them. Some of these expenses are:

  1. Hospital and Nursing Home Services: If you’ve had to pay for hospital stays or nursing home services, these costs can typically be counted towards your spend down.
  2. Home Healthcare: Expenses incurred from home care services, such as nursing care, physical therapy, or home health aide services, may also be included.
  3. Doctor’s Visits and Prescription Medications: Regular doctor visits and the cost of any prescribed medications can be counted.
  4. Medical Supplies and Equipment: Costs for medical supplies like wheelchairs, walkers, or diabetic testing kits can also be included.
  5. Transportation to Receive Medical Care: If you need transportation to get to and from medical appointments, these costs may count towards your spend down.
  6. Health Insurance Premiums: Premiums you pay for other health insurance can also be counted in your spending down.

Remember, each state has specific rules about what can be counted as a medical expense. Consult with a trusted advisor, your local Department of Social Services, or a Medicaid office to ensure you include all eligible expenses.

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