Medicaid Spend Down Requirements

A Medicaid spend-down program allows certain people with income and assets in excess of the Medicaid thresholds to receive benefits. It works like an insurance deductible and requires people to pay towards their care until the excess income or assets are used up. At that point, Medicaid will pick up the payments.

Basic Requirements

• Each state runs its own Medicaid program, but the basic guidelines are the same across in all states. You must be 65 or older, blind, or otherwise disabled to qualify for a Medicaid spend-down program. Some states allow children and their parents to participate as well. You have to be a U.S. citizen or a legal immigrant and a permanent resident of the state in which you are applying.

Income and Asset Reduction

• You have to reduce your income and assets to below your state threshold. You can do this by paying for your medical expenses out-of-pocket until the surplus is spent. Qualified expenses include doctor and hospital bills, medical supplies and prescriptions. Medicaid spend-down rules require married couples to reduce income and assets by half. Some assets, such as a primary residence and vehicles, are exempt from spend-down requirements.

Time Frame

• You have to redo the spend-down process every six months. Each spend-down period lasts six months. You will have to pay for your medical costs until you reach the spend-down limit. At that point, Medicaid will pay for your costs for the rest of the six month period.