The budget period is the time frame over which the medically needy individual's income is calculated. The state computes how much the individual's total income over the budget period exceeds the eligibility standard. This excess income is the amount the individual must Spend Down to become eligible for Medical Assistance. Once the individual shows that he or she has incurred medical expenses equal to or greater than the Spend Down amount, s/he will receive Medical Assistance to cover any additional medical expenses for the remainder of the budget period. At the end of the budget period, people must again show how much their income exceeds the state's threshold and again document that they have paid or incurred medical and remedial expenses to meet the Spend Down.
States may set budget periods of any length. The Medical Assistance Spend Down implementation defaults the budget period to one month, which is set by an environment variable within the system. It is important to note that multiple budget periods within a single Spend Down period, where the caseworker would need to meet the Spend Down in each budget period of the Spend Down period, are not supported.