Briefly, Medicaid is a public health insurance program administered by each state and is targeted toward those households with low income. There are coverage restrictions, sub-programs for special groups, and recipient responsibilities. Eligibility is determined on a monthly basis.
What Is a Spend Down?
A Medicaid spend down is a monthly deductible due by the individual recipient or in the case of a minor child, the parents. Spend down recipients qualify for Medicaid coverage but whose household income is just higher than the maximum allowed for full coverage. The spend down or monthly deductible is the difference between household income and the maximum income level of full coverage. Note: “Household” includes non-relatives living at that address.
How Does a Spend Down Affect Medicaid?
Since all types of insurance programs generally have a deductible clause, the first “X” amount of dollars incurred each month is the beneficiary's financial responsibility until the spend down amount is met. All covered service received after that amount become the state's responsibility for payment. The biggest difference between a Medicaid spend down and a private insurance deductible is the monthly versus annual payment responsibility.
Who Determines When a Spend Down is Met?
When someone applies for Medicaid, the state assigns from Social Services a Medicaid case worker. The case worker works closely with the applicant to determine eligibility, Waiver program enrollment, if applicable, and economic restrictions and conditions such as determining spend down requirements. The case worker receives medical bills from the recipient—not the medical provider—and computes, according the spend down amount, when the state's responsibility starts as delineated on an 8A Form. The case worker sends all known providers whose bills fall into the spend down amount or have been affected by no 8A Form on file with the state. The portions of each providers' bills are determined to be due in full or in part by the recipient or the state, depending on the exact 8A Form information.