Spend Down is a Medical Assistance term used for persons whose income and assets are above the threshold for the state's designated medically needy criteria, but are below this threshold when medical expenses are factored in. The difference between the individual's gross income less deductions and the actual income limit for the particular Medical Assistance program is called the Spend Down amount. Spend Down is calculated on a period basis, and both eligibility and the Spend Down amount are re-determined each period.
An individual can meet the Spend Down amount by submitting allowed medical expenses to reduce/meet the Spend Down amount. Some states permit clients to pay cash to reduce/meet the Spend Down amount; this cash payment is called Pay-In. A combination of certain Expenses and Pay-In can be used to meet the Spend Down amount.
Spend Down is calculated on a period basis. Eligibility and the appropriate Spend Down amount must be re-determined each period. When the individual meets this Spend Down amount, they can receive Medical Assistance coverage from the date that Spend Down was met until the end of the specified Spend Down period. Spend Down does not apply to all Medical Assistance programs. Medical expenses which are allowed to be used to meet Spend Down vary across states.
People covered through a Spend Down approach are known as the Medically Needy. The Spend Down implementation covers the following groups of people that are Medically Needy if they meet income and resource eligibility guidelines or Spend Down to the eligibility guidelines: