Medicaid Spend Down
Medicaid spend down helps some individuals receive Medicaid benefits once they meet eligibility requirements, even if they normally have too much income to qualify for Medicaid.
Learn about Medicaid spend down, some of the rules and asset exemptions, potentially a particularly important consideration for individuals pursuing senior care, senior living or senior housing options.
What is Medicaid Spend Down?
Medicaid spend down provides a means for individuals that have too much income to qualify for Medicaid during months that they meet their “spend down” amount. The spend down amount for one person likely differs from that of another person, due to eligibility requirements and your income.
When you have too much income to qualify under regular Medicaid income limits, the amount of your monthly income over the limit is referred to as “excess income.” Under Medicaid spend down, you subtract your medical expenses from your excess income to qualify for a Medicaid card and Medicaid eligibility during each month that you meet your spend down amount. This is not difficult for some individuals with high medical expenses due to doctor visits, medical care or prescription drug costs.
Qualifying for Medicaid during some months likely helps with senior care and senior living decisions. If you have medical expenses from adult day care, in-patient senior care, treatment at a skilled nursing facility, nursing home or another senior care facility, inform the Medicaid representative when you apply for Medicaid spend down benefits.
What Are Some Medicaid Spend Down Rules?
The New York Medicare Rights Center provides excellent examples to help you or your loved one understand rules associated with the spend down program. Ask a Medicaid representative about Medicaid income limits for your state or ask a representative at your senior care or senior living facility to help you determine the Medicaid income limit for your state.
The example given by the New York Medicare Rights Center suggests considering your monthly income is $1,145 and the individual monthly income Medicaid limit in your state is $845. Next, subtract the Medicaid income limit from your monthly income to get $300. The $300 in this example demonstrates what your spend down amount will be each month.
The fact that incomes vary from one person to the next and state income limits for Medicaid vary from one state to another is why your spend down is likely not the same as the next person.
There are other rules governing Medicaid spend down eligibility. You have to either be disabled or blind, a child under 21 or an adult over 65 years old or a family with one or both parents who are deceased, disabled, absent or unemployed.
What Are Some Medicaid Spend Down Strategies?
You can meet your spend down amount to receive Medicaid eligibility and your Medicaid card by choosing from a variety of options. Make payment to your Medicaid office for your specific spend down amount. Make sure you speak with an agency representative before writing a check because different states have different requirements regarding acceptable spend down payment methods.
Another strategy is to provide actual proof that your medical expenses are equal to or exceed your spend down amount. Using the previous example, take medical bills and receipts that total at least $300 to the Medicaid office in your area.
Provide more than one month of bills and receipts for medical care and services at a time as another strategy. If still using the previous example, you provide medical bills and receipts totaling $900, you receive three months of Medicaid coverage.
When considering which bills and receipts to provide, take all of them. There is a possibility that all your bills and paid receipts qualify to help you meet your spend down amount. Make sure you provide insurance premium statements and receipts for over-the-counter medications as part of your strategy to meet regulations that Medicaid uses to declare you “medically needy” for Medicaid.
If you had a recent hospital stay, you potentially qualify for up to six months of Medicaid. Mention any recent hospital stays and if you went to a senior care or senior living facility after your hospital stay as a strategy to help you reach your spend down amount.
If you know you have an upcoming surgery or diagnostic procedure, you likely want to strategize so that you meet your spend down to receive Medicaid coverage for that month.
What Are Some Medicaid Spend Down Exemptions?
Exemptions from Medicaid spend down are those things that Medicaid cannot count towards your assets and resources. The agency cannot force you to sell them to spend down your assets to meet program qualifications.
The primary home that you or your spouse currently occupies is exempt, as long as you hold the title and plan to return to that home. This exemption applies even if you or your spouse are at a nursing home, skilled nursing facility or another senior living facility beyond the six-month limitation of most states if the other party still occupies the home.
If you are single and intend to return to that home, it is exempt from countable spend down assets.
If you have income-producing property, such as a business that provides self-support, it is exempt as a spend down asset. One family automobile, your household goods, and personal effects are other examples of Medicaid spend down exemptions. Some pre-paid funeral plans also qualify as exemptions.
Where Can I Find Help With Medicaid Spend Down?
Call or visit your local Medicaid office to get help with applying for the Medicaid spend down program.
Meet with a qualified agency representative at your senior care or senior living facility to get assistance with Medicaid spend down questions.
Some people prefer to discuss the situation with an estate planner or attorney to understand their rights and responsibilities regarding Medicaid spend down. This possibly helps with understanding which assets count as Medicaid spend down exemptions in your state, how to safely transfer assets without penalty and other information about Medicaid spend down.