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Medicaid: Spend Downs (also known as: Medically Needy)


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States may adopt spend down rules which reduce your countable income for purposes of determining whether your income is too large to qualify for Medicaid.

Spend downs are called different things in different states. In some states, they are called a "Share of Cost." In others they are called a "Deductible." Spend downs are also commonly referred to as "Medically Needy."

Under a spend down, you can reduce your income in a month by medical expenses which were incurred during the month. Spend downs work are follows:

  • The difference between a person's income and the maximum income under Medicaid becomes like a monthly deductible that must be met before Medicaid starts paying the bills for that month.
  • Medical expenses incurred in the month.can be used to reduce income for purposes of eligibility. (Generally the question is the time of when the bill is incurred, for example when you see the doctor or take the test. It isnot necessarily when the expense is paid.)
  • Once medical bills are large enough during a month to reduce income to an eligible level, Medicaid coverage is triggered and takes over payment of the medical charges incurred for the remainder of that month.
  • Medicaid does not pay for the expenses that were used to meet the spend down.
  • The process is repeated every month. 

For more information, see:

NOTE: As a general matter, you can provide an estimated bill once you know about medical care you will incur in a month. You don't have to wait until you get the service or receive the bill. For example, if you have a doctor's appointment on October 5. It is currently September 15. You can get an estimated bill for the cost of the visit and submit it on October 1. By October 5 you've been cleared and Medicaid will cover any other medical bills incurred during that month.

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