Medicaid Spend Down Law and Legal Definition

Medicaid is a medical assistance program jointly funded by state and federal governments for low income individuals who are elderly (65 years and older), disabled, blind, or who meet some other category of eligibility. People with low income automatically qualify for Medicaid. However seniors and people with disabilities, whose incomes exceed the income limit, may qualify for Medicaid only if they have medical bills that equal or are greater than their "excess" income. The process of subtracting those medical bills from the individual’s income over a six month period is called a Medicaid spend-down. For example, 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 spend-down in this case is the $50 she spends.