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When a Medicare beneficiary income is above the Medicaid income guidelines in your state, the state may offer a spend-down for aged, blind, and disabled individuals who do not meet Medicaid income eligibility requirements. A spend-down would allow to deduct certain medical expenses from your income so that you can qualify for ABD Medicaid benefits. If you have medical expenses that significantly reduce your usable income, you can use them to qualify for Medicaid coverage. Below is a general guide to the Medicaid spend-down process. Contact your local Medicaid office to learn if a spend-down program is available for you, and the rules for applying.

  • The spend-down amount will be the difference between the Medicare beneficiary income and the Medicaid eligibility limit, as determined by the state over a given length of time (one to six months). Some states require Medicaid beneficiaries to submit receipts or bills to Medicaid to show their monthly expenses. Other states may let beneficiaries pay a monthly premium directly to Medicaid for the amount that their income is over their state’s Medicaid spend-down level. Spend-down income limits may be lower than the Medicaid income limits for people who do not have a spend-down. Each period that a person has enough medical expenses to meet her spend down, they will have Medicaid coverage. If they do not meet their spend-down amount for a certain period of time, they will not have Medicaid coverage for that time. A person can still get Medicaid coverage later if they meet their spend-down amount during another period of the year. Medicare will pay first for covered services, and Medicaid will pay second for qualifying costs, such as Medicare cost-sharing. Some people decides to work and receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), check with your local Medicaid office to see how much earned income is allowed to have without losing those benefits.

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