Medicaid Letters: Medicaid Spenddown

What is a Medicaid spenddown?

        Some people have too much income to qualify for Medicaid. This amount is called excess income. Some of these people may qualify for Medicaid if they spend the excess income on medical bills or incur bills equal to the excess income. This is called a spenddown.

        For example, a person over 65 is denied Medicaid because her monthly income is $50 more than the limit for Medicaid eligibility. If she spends, or incurs $50 per month of medical bills, the rest of her medical bills will be covered by Medicaid. The spenddown in this case is the $50 she spends.

        Instead of paying the bills to the provider, if you have a spenddown it may be easier to send a check each month to the Department of Social Services for the amount you have to spend down. Your Medicaid coverage is sure to continue if you do this. This is called relief repayment. Ask your worker about this.

Who can get a spenddown?

        Not everyone. You must be in one of the groups listed below:

1. child under 21

2. adult over 65

3. blind or disabled

4. families with one or both parents absent, dead, disabled, or out of work

        If you were denied Medicaid and not offered a spenddown, but fall within the categories above, you have 60 days from the denial to request a Fair Hearing. Notify NYS OTDA by telephone, fax, or mail that you want a Fair Hearing. You can write on the back of your notice the reason for requesting the hearing. If you phone, get the name of the person you speak to. If you write, send your letter by certified mail and keep a copy. The correct address is:

New York State Office of Temporary and Disability Assistance (OTDA)
Office of Administrative Hearings
P.O. Box 1930
Albany, New York 12201-1930
Telephone No.: 1-800-342-3334 or (716) 852-4868
Fax No. (518) 473-6735 (you must have form from Albany)

How does a spenddown work?

        It works almost like a deductible for car insurance. When you have accumulated medical bills (paid or unpaid) greater than your excess income, you will get Medicaid for that month.

        Make sure that the medical bills you request Medicaid to pay are providers who accept Medicaid payments. Medicaid will only pay bills from a provider who accepts Medicaid payments. You can use medical bills from a provider who does not accept Medicaid to meet your spenddown.

        If you have been hospitalized recently, you may qualify for Medicaid for up to 6 months. If you have been hospitalized within the past 6 months, be sure to tell your worker.

What medical bills can be counted toward a spenddown?

1. Your own medical bills.

2. Your spouse’s bills.

3. Parents’ bills for their children’s spenddown.

4. Bills of a child living with you.

5. Bills of a child who does not live with you, but whose medical bills you help pay for.

6. Past unpaid medical bills (if they are still viable) for yourself or any of the people named above.

7. The part of any medical bill not covered by Medicare or private insurance.

8. Medical expenses (including insurance premiums) paid for you by certain public programs, for example, the Elderly Pharmaceutical Insurance Program (EPIC).

What types of medical expenses count toward a spenddown?

        Many types, including:

1. Paid and unpaid medical bills from previous months.

2. Transportation expenses to get medical services (sometimes).

3. Medical expenses or payments to therapists, day treatment and drug and alcohol programs, nurses, personal care attendants, and home health aides (as required by a physician).

4. Prescription drug bills.

5. Payments made toward surgical supplies, medical equipment, prosthetic devices, hearing aids, and eye glasses (as ordered by a physician).

Are there others that count?

        Yes. The following medical expenses also count toward a spenddown although Medicaid will not pay for them:

1. Medical services not covered by Medicaid.

2. Medical services from providers who do not participate in the Medicaid program.

3. Some over-the-counter drugs and medical supplies, such as bandages and dressings, if they have been ordered by a doctor or are medically necessary.

        Bills for cosmetics and other non-medical items do not count.


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