Understanding Medicaid Spend-Down

Medicaid is a program funded jointly by the federal and state governments. The federal government sets certain parameters that all states need to follow, but the actual administration of the program is managed by the state, which means that benefits and coverage for someone in New York may be different from the benefits and coverage of someone living in another state. The main purpose of Medicaid is to provide healthcare coverage for people with limited income.

The most important aspect of Medicaid coverage is income, so that only those people who really need the benefits are able to avail them. If some people have too much income, they may not be able to obtain Medicaid benefits. However, if those people spend their excess income on medical bills, they could possibly be eligible for Medicaid. This is known as Medicaid Spend-Down and every state, including New York, has its own set of laws that define the value of assets an applicant can hold, but still be eligible.

It is also important to remember that everyone cannot avail Medicaid Spend-Down. In order to be eligible for Medicaid Spend-Down in New York, the applicant must be: a child under the age of 21; an adult over the age of 65; a person who is disabled or blind; or a family in which one or both parents are absent, dead, disabled or out of work. Whenever an individual's medical expenses exceed the excess income, that individual receives Medicaid, which means that Medicaid covers those bills above the excess amount.

Several types of medical expenses are considered in Medicaid Spend-Down. Examples would include: a person's own medical bills; a person's spouse's medical bills; medical bills of a person's children; medical bills of someone else's child who is residing in the household; medical bills of a child who does not live in the household, but whose bills the applicant helps pay; past unpaid medical bills; leftover from medical bills that were not covered by Medicare; and medical expenses paid by some public-funded programs on behalf of the applicant.

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