By Alex Rosenberg | NerdWallet
In 2023, over 1.4 million individuals have lost their Medicaid coverage due to not meeting the eligibility requirements, as reported by KFF, a health policy nonprofit, in their August tracking data.
After the pause on disenrollments during the COVID-19 public health emergency, beneficiaries must now provide proof that they still meet the income limits for Medicaid. If their income has increased, they are at risk of losing their coverage.
What some beneficiaries may not be aware of is that even if their income exceeds the Medicaid limit, they may still be able to spend down some of their income to qualify. Certain beneficiaries can subtract their medical bills, including Medicare premiums, from their income when applying for Medicaid.
Understanding Medicaid Spend-Down
A spend-down is comparable to a health insurance deductible, as explained by Catrice Simpson, a supervisory social service representative for the Washington, D.C. Department of Health Care Finance. Simpson states that a spend-down is the threshold that must be met or exceeded before Medicaid starts covering expenses.
For instance, if someone’s income is $200 above their state’s Medicaid limit, they may become eligible if they have at least $200 in qualifying medical bills.
Individuals who qualify as “medically needy,” such as those with disabilities, children, or individuals aged 65 and older, can spend down their income to qualify for Medicaid.
The criteria for medically needy status differ by state. For example, in Washington, D.C., parents or caretakers of children under 21, pregnant individuals, and people in nursing homes can also spend down their income to become eligible for Medicaid.
Impact of Spending Down on Medical Bills
Spending down to meet the income requirements for Medicaid means that Medicaid can cover some of your medical bills. However, it will not reimburse you for the bills you used for the spend-down.
For example, if you paid $300 out of pocket for a doctor’s visit and subtracted that amount from your income, Medicaid will not provide reimbursement. However, additional bills that were not used for the spend-down could be covered by Medicaid.
If you have both Medicaid and another form of coverage, they can work together to pay for your care. Medicare, for instance, pays for services first, and then Medicaid covers additional costs that Medicare did not cover, such as certain copays, coinsurance, and deductibles.
Benefits for Medicare Beneficiaries
Medicare covers most healthcare for individuals aged 65 and older and those with certain disabilities. However, it does not cover long-term care, as emphasized by Connecticut elder law attorney Daniel Tully.
Medicaid, on the other hand, does cover long-term care, making it an option for those facing high costs not covered by Medicare. Beneficiaries may qualify for Medicaid by spending down or taking other estate planning actions, such as establishing a Medicaid-compliant trust, according to Tully.
Medicare beneficiaries who spend down to qualify for Medicaid receive an additional benefit: the “Extra Help” subsidy. This subsidy covers premiums, deductibles, and most out-of-pocket costs for Medicare Part D, which covers prescription drugs. The government estimates its value at approximately $5,300 per year.
Assistance with the Spend-Down Process
Your state’s Medicaid agency can provide detailed information on Medicaid eligibility rules, including the spend-down process. You can find eligibility and enrollment details, as well as contact information, by selecting your state on Medicaid.gov.
Medicaid planning laws can be complex, so it is advisable to seek advice from a professional, says Tully.
You can receive free personalized counseling from your State Health Insurance Assistance Program (SHIP). SHIPs have offices and counselors who can provide specific information about Medicare, Medicaid, and related programs based on your state and situation. Find your local SHIP office at shiphelp.org.
Though the spend-down process may initially seem overwhelming, Simpson assures that once it is explained, individuals with medical bills usually do not hesitate to begin the process.
This article was written by NerdWallet and originally published by The Associated Press.
More From NerdWallet
Alex Rosenberg writes for NerdWallet. Email: [email protected]. Twitter: @AlexPRosenberg.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
