Understanding the Medicaid 'Spend Down' Program
Alert: The Affordable Care Act Will Change All Of This, Beginning January 2012.
Expanded Medicaid. The new "Expanded Medicaid" program will cover almost everyone who previously needed the Spend Down program. If you meet the household size and income factors, you will be covered by Expanded Medicaid.
Those income limits are higher than most people realize.
If you or your family are in these limits, you should go to DHHR to apply NOW for Expanded Medicaid coverage beginning January 1, 2014. There will be no monthly premium costs for Expanded Medicaid.
"Marketplace" health insurance. If your household income is higher than these limits, you should go through the on-line "Marketplace" to shop for health insurance for your family beginning January 1, 2014. Financial assistance is available, depending on household income. You cannot be denied based on pre-existing conditions.
For more Legal Aid information about Expanded Medicaid and the Affordable Care Act, click this link: http://www.lawv.net/dir/2751
But until January 1, 2014, all of the following information is important:
Do you have high continuing medical costs, but too much income for the regular Medicaid Program? Learn about the "Medicaid Spend Down Program." You may be able to get Medicaid help in paying some of those medical costs.
Using Medical Debts to Get Medicaid Coverage
WHAT IS THE MEDICAID “SPEND DOWN” PROGRAM?
This is a program for people who have too much income for the regular Medicaid program, but who also have high medical bills. In this program Medicaid can pay some, but not all, of your medical bills.
You must show your medical bills are equal to a required dollar amount. Once you do that Medicaid will pay any additional medical bills. In effect, you "spend down" your income by meeting some of the medical bills.
It is like paying a “deductible” in an insurance policy. You have to pay some first. Then Medicaid will cover the rest.
This benefit is granted for six months at a time. Every six months you will have to meet a new “spend down amount.”
You will be responsible for all medical bills up to your “spend down amount.” Medicaid will cover all medical costs above that amount for the rest of that six month period.
When you run up enough medical bills to meet “the Spend Down” for a six-month period, take them to DHHR. You will then get a medicaid card that will cover any other medical costs you have during that six months.
Every six months, you have to do this all over again.
WHO DECIDES HOW MUCH OF MY INCOME IS “EXCESS”?
The WV Department of Health & Human Resources uses a chart of income amounts for family sizes. The DHHR chart sets a pre-determined amount of income for different family sizes. Any income you have above that chart amount will be your “spend down” amount. It doesn’t matter what your actual bills and living expenses may be. The DHHR chart is the only thing that matters.
- For example, DHHR considers $200 per month as the “necessary” amount of income for a one-person household. Any income above $200/mo for one person will be the Spend Down amount.
DO I HAVE TO DO THIS EVERY MONTH?
No. DHHR uses a six-month “period of consideration.” Instead of figuring this out every month, DHHR will take the next six months starting with the date of your application.
DHHR will start with your monthly income. It will then figure out the “excess” amount for one month. DHHR will then multiply the one-month amount by six. The result will be the Spend Down amount for the whole six months.
Example: Joan lives by herself. She has income of $600 a month.
The DHHR chart for one person says that all income over $200 per month is the Spend Down amount. Joan has $400 a month over that limit.
Multiply this monthly amount over the six-month period. Joan will have a total “Spend Down Amount” of $2,400.
The $2,400 is Joan’s ‘target’ amount of medical bills she must have before Medicaid will kick in during that six months. If Joan does run up $2,400 in medical costs during the six-month period, Medicaid will cover all other medical needs during that six months.
WHAT IF I CANNOT AFFORD TO PAY MY SPEND-DOWN AMOUNTS?
You don't have to pay the full amount of the spend-down, you just have to owe the amount. You will still be responsible for the old bills you owe. But you can make arrangements to pay the old bills off more slowly. In the meantime, your medical bills above the spend-down amount will be paid by Medicaid.
CAN I USE OLD MEDICAL BILLS AGAINST THE SPEND DOWN AMOUNT?
Yes, but there are two conditions:
- the old medical bills must be still unpaid and still legally owing; and
- the old medical bills have not already been used to meet a Spend Down Amount in a previous six-month period.
For example, suppose Joan owes $10,000 from being in the hospital last year. She can use $2,400 of that old bill to meet the Spend Down Amount. She will then have Medicaid Coverage for her entire six month length of time.
Remember, the old medical bills must still be “legally owing.” If the bills are very old, the hospital or doctor might have “written them off” as uncollectible.
- As long as you are still receiving bills, then the debt has not been “written off.” Take your most recent bill or collection letter to DHHR to show them it is still active.
- If you don’t have any recent bills or collection letters, DHHR may check with the doctor or hospital to verify that an old bill is still “legally owing.”
Also remember that old medical bills can be used only once. Joan will use a portion of the $10,000 old hospital bill to meet her first Spend Down. She will then have only $7,600 left for future Spend Down Amounts.
Finally, remember that Medicaid will not pay the old bill. Joan will still owe the hospital $10,000.
WHEN DOES THE MEDICAID COVERAGE BEGIN?
On the day that you ran up the bill that got you to the full Spend Down amount.
It may take you some time to receive the bills and take them in to DHHR. Don’t worry. Medicaid will go back to the date when you ran up the bill that put you over the top.
If you meet your Spend Down very early in your six month period then you’ll get a lot of benefit. Medicaid will pay all other medical bills for the rest of that six month period.
If you don’t meet your Spend Down until very late in the six month period then you won’t get much benefit. Perhaps only a few days or weeks. In that case you might decide to hold those bills to use against the next Spend Down Amount. Don’t use them up if it won’t do you much good. Instead, submit them in the next six month period. You might get coverage for more time that way.
WHAT ARE THE ELIGIBILITY REQUIREMENTS FOR THE SPEND DOWN PROGRAM?
There is an asset limit on how much money and property you can own. Also, you must be either disabled or be age 65 or older, OR your household must have children under the age of 18.
WHAT IF I DON'T THINK I SHOULD HAVE A SPEND-DOWN, OR I DON'T AGREE WITH HOW MY CASEWORKER HAS CALCULATED MY BILLS?
You can appeal. Send your caseworker a letter saying you want to appeal. You can contact a private attorney or your local legal aid office for assistance.
The “Spend Down Program” requires you to spend your ‘excess income” on medical costs.
- The “Spend Down Program” uses a six-month period of time.” DHHR will calculate your income for six months to determine your Spend Down Amount. After you submit your application, DHHR will give you a notice telling you what your Spend Down Amount is.
- When you have run up medical bills equal to the Spend Down Amount, take your bills to DHHR. They will then give you a Medicaid card to cover any additional medical costs you have in that six month period.
- You can use old unpaid medical bills to meet your Spend Down Amount, as long as (1) they are still legally due and owing, AND (2) they have not already been applied against a Spend Down Amount for a previous six month period.
Keywords: medical bills medical costs Medically Needy MMN Medical Assistance Only MAO Medically Needy Income Level MNIL Protected Income Level PIL spin down spenddown spendown spindown
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