Medicaid Spend Down: A Guide for Managing Medical Debt

Medicaid is the federal insurance program that provides coverage to low-income individuals who cannot afford private insurance. Although Medicaid is a federal program, each state has its own requirements and eligibility criteria. You will need to apply for Medicaid coverage in your state. If you exceed the income limitations, but have a significant amount of medical debt, you can apply for a Medicaid "Spend-Down." Your income will be used to determine your deductible. Once you meet the deductible by paying your bills, Medicaid will pay any bills thereafter.

Instructions

• 1

  Apply for Medicaid. You will need to submit a Medicaid application to determine your eligibility. If you do not know how to locate your Medicaid office, contact the Department of Health and Human Services.

• 2

  Wait for a response. Your application will either be approved or denied based on your income and assets. If your application is denied because you exceed the income requirements, you will be sent a Spend-Down notice. You must meet the asset requirements in your state.

• 3

  Gather all medical bills. Usually the spend down period lasts six months, although it can vary depending on the state. Provide any unpaid or paid medical bills.

• 4

  Submit copies of your bills to your assigned caseworker. The bills are subtracted from your income. If the amount remaining still exceeds the Medicaid income limit, you will be required to pay the medical bills in excess before Medicaid coverage begins paying.