If you need Medicaid coverage and your income is above the Medicaid income guidelines in your state, your state may offer a Medicaid spend-down for aged, blind, and disabled (ABD) individuals who do not meet eligibility requirements. This program allows you to deduct certain medical expenses from your income so that you can qualify for ABD Medicaid. If you have medical expenses that significantly reduce your usable income, you may qualify for a Medicaid spend-down.
The spend-down program may also be referred to as a medically needy program or Medicaid’s Excess Income Program. Below is a general guide to the Medicaid spend-down process. Contact your local Medicaid office to learn if a spend-down program is available in your state, and the rules for applying.
- Your spend-down amount will be the difference between your income and the Medicaid eligibility limit, as determined by your state over a given length of time (one to six months). Some states require you to submit receipts or bills to Medicaid to show your monthly expenses. Other states may let you pay a monthly premium directly to Medicaid for the amount that your income is over your state’s Medicaid spend-down level. Spend-down income limits may be lower than the Medicaid income limits for people who do not have a spend-down.
- Each period that you have enough medical expenses to meet your spend-down, you will have Medicaid coverage. If you do not meet your spend-down amount for a certain period of time, you will not have Medicaid coverage for that time. You can still get Medicaid coverage later if you meet your spend-down amount during another period of the year.
- Medicare will pay first for covered services, and Medicaid will pay second for qualifying costs, such as Medicare cost-sharing.
- Your state may require you to qualify and apply for spend-down for multiple periods in order to qualify for Medicaid inpatient hospital coverage.
- States with spend-down programs may allow you to use the spend-down program to qualify for Medicaid coverage of your nursing facility stay or home and community-based waiver services.
- Note: If your state does not have a spend-down program, it should have more generous Medicaid income guidelines for people who need nursing home care than for those who do not.
- Medicare will pay first for covered medical services, and Medicaid will pay second for qualifying costs, such as Medicare cost-sharing.
- You will automatically qualify for Extra Help the first month that you meet your Medicaid spend-down amount until the end of the calendar year (even if you do not meet your spend-down amount every period).
- Trusts, such as Miller Trusts and Supplemental Needs Trusts or Special Needs Trusts, are available in some states to help you become Medicaid-eligible. Trusts allow people with disabilities and income or assets higher than Medicaid eligibility guidelines to place a portion of their income or assets into the trust, where it will not be counted. Rules about how these trusts work vary greatly by state. For more information, contact your local Medicaid office or an elder law attorney.
- Some states offer the Medicaid Buy-In program, which allows people who are under age 65 and have a disability to work (as little as one hour per month) and still receive Medicaid benefits.
- The program is designed to help people with disabilities who would otherwise not be eligible for Medicaid health coverage because their income or assets are too high. If you qualify, you may be able to receive Medicaid by paying a premium to buy in to the program. Financial eligibility guidelines vary by state. Check with your local Medicaid office for eligibility information.
- If you decide to work and are receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), check with your local Medicaid office to see how much earned income you are allowed to have without losing those benefits.