Paying for care
Spend down
Spend down is a way to qualify for Medicaid when your income is above the state limit. In states with a medically needy program, you subtract medical expenses from your income. When the remainder reaches the limit, you become eligible. Medicaid then pays for care after the spend-down amount is met.
Why it matters for your family
The idea is simple, but the details are state specific. Imagine a person whose monthly income is $600 above the limit. Medical bills of $600 can bring countable income down to the limit, and Medicaid pays for care after that. The bills only need to be owed, not paid. Some states use a monthly budget period, so the spend down repeats. A common mistake is to confuse income spend down with giving away assets. They are different, and gifts can trigger a penalty. Some states have no medically needy program at all. Ask the state Medicaid agency or an elder law attorney.
Source: acl.gov
Related terms
- Medicaid eligibilityMedicaid eligibility for long-term care depends on need, income, and assets.
- Income cap trust (Miller trust)An income cap trust, also called a Miller trust or income-only trust, holds part of a person's monthly income so the person can meet a state's Medicaid income limit for long-term care.
- Medicaid planningMedicaid planning is the legal arrangement of income and assets so a person can meet Medicaid rules for long-term care.
- Look-back periodThe look-back period is the time window Medicaid reviews when someone applies for long-term care coverage.
- Medicaid asset limitThe Medicaid asset limit is the cap on countable assets a person may own and still qualify for Medicaid long-term care.
- Elder law attorneyAn elder law attorney is a lawyer who focuses on legal issues of older adults.
