Medicaid has restrictions that prevent certain income levels from qualifying. However, Medicaid offers a program called the Excess Income program. Otherwise known as the Surplus Income program or Spenddown program, the goal is to provide Medicaid for people who have medical bills equal to their excess income in a particular month. Excess income is any income you earn that puts you above Medicaid levels. According to the New York Department of Health, if you have medical bills that cost more than your excess income, Medicaid deducts that amount and pays the remainder.
Who is eligible to participate in the excess income/spend-down program?
You must be under age 21, age 65 or older, certified blind or certified disabled, pregnant or a parent of a child under age 21. This allows you to become eligible for Medicaid even though your monthly income is too high.
If your monthly income is over the Medicaid level, you may still be able to get help with your medical bills. The amount your income is over the Medicaid level is called excess income. It is like a deductible. If you are eligible for Medicaid except for having excess income and you can show that you have medical bills equal to your excess income in a particular month, Medicaid will pay your additional medical bills beyond that for the rest of that month. This includes outpatient care, doctor and dental visits, lab tests, prescription drugs, and long-term care in the community such as home care and assisted living.
When can a Pooled Trust be Used?
Recipients of long-term care in the community can also use Pooled Trusts. In New York State, income deposited into a pooled income trust by recipients of long-term home care and/or assisted living, is disregarded for the purpose of determining their Medicaid budget. The “surplus” or “excess” income that is deposited into a pooled income trust qualifies them for Medicaid without having to “spend-down”. The money they deposit into the pooled income trust remains available to them to pay their household bills. It is best to seek the advice of an Elder Law attorney in determining eligibility for pooled trusts.
The Pay-In program
You may use the Pay-In program if you need medical care but do not have any bills to count towards excess income. In this instance, you pay your surplus income to social services, qualifying you for Medicaid. Only resort to this if you need medical assistance for that month.
Previous medical bills
You may also use past medical bills to count towards the Excess Income program. You can only use past statements one time. In addition, you may use paid medical bills from three months before you apply for Medicaid. The amount on these bills may apply to the next six months of Medicaid coverage and, in some cases, retroactively to the previous three months before you applied.
Medical services can fall outside the range of your income level. Medicaid attempts to offer its services to people in need of assistance, even when they earn above the restricted income level.