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Overview:
If you have a lot of medical bills, but your income is too high to qualify
for “regular” Medicaid, you may be eligible for the Medically Needy program.
Children, persons with disabilities, pregnant women, and the elderly who
have family income which exceeds the established income limit for “regular”
Medicaid may be eligible under the Medically Needy program. The Medically
Needy program allows an individual to use incurred/unpaid medical bills to
“spend down” the difference between their income and the income limit to
become eligible. People with higher incomes qualify if they have medical
bills equal to or greater than the amount by which their income exceeds the
Medically Needy Income Levels (MNIL).
Medically Needy Spend Down is the one Medicaid eligibility group that has no
absolute income limit. It operates like a private insurance policy with a
deductible. People qualify financially for Medically Needy Spend Down when
they have medical bills large enough to meet their deductible - the amount
by which their income exceeds the Medically Needy Income limit. The resource
limits for Medically Needy are also higher than those for other categories
of eligibility.
Here’s an Example of How it Might Work for a Family Situation:
Jamie Brown is fourteen years old. He is hospitalized in March and the bill
is $8,260. Jamie lives with his mother whose gross monthly income from
employment is $4000. Jamie’s family seeks Medicaid to pay for his hospital
bill. Jamie does not meet the SSI definition of a disabled child. Therefore,
he seeks Medically Needy Spend Down-Pregnant Women, Infants and Children.
The Medically Needy Income Level for two is $317. In determining
eligibility, after allowed deductions, the family’s monthly “countable
income” is $2587, which is $2270 over the $317 limit. Since the outstanding
medical bills are $8260, $2270 of that would be used to “spend down” to the
income limit. Medicaid would pay for the remaining $5990 of the hospital
bill. Medicaid will not pay for the $2270 in hospital bills that Jamie used
to spend down to the Medically Needy Income Level. However, Jamie may be
eligible for another source of free or reduced cost care to pay for the
hospital costs.
Medical Bills That can be Used to Spend Down and Become Eligible for
Medicaid:
Almost any medical bills the applicant or the applicant’s family still owes
or which were paid in the months for which Medicaid is sought (called the
"budget period") can be used to meet the Spend Down requirement--bills from
doctors, pharmacies, hospitals, even travel to and from care. Health
insurance and Medicare premiums may be used. Bills paid by health insurance
or other private third party payers may not be applied to the Spend Down.
However, bills paid by state and local government programs may be used to
meet the Spend Down amount. Bills paid with borrowed money, like credit
cards, may be used if the applicant still owes the money or if the money was
repaid during the budget period.
Period of Eligibility:
Eligibility for Medically Needy Spend Down is computed on a month-by-month
basis. Eligibility can be certified for up to six months depending on the
size of the medical bills and the applicant’s spend down amount. Eligibility
can also be for up to three months prior to the month of application.
Medically Needy Spend Down will not pay medical bills that are used to reach
the Spend Down income level, but it can pay other outstanding bills incurred
in the three months prior to application and for care obtained once eligible
for Medicaid.
How Medically Needy Spend Down Works:
In determining financial eligibility for Medically Needy-Pregnant women,
Infants and Children countable income and resources are computed the same
way they are for these categories of regular Medicaid. The same deductions
from income apply.
Medically Needy Medicaid can help pay ongoing medical bills and it can also
help pay outstanding hospital and other medical bills incurred within three
months of the date of application for Medicaid.
How to Apply:
To apply for this program, contact your local Department of Family and
Children Services (DFCS) office. Check our
Special Needs Database for
the nearest Family and Children Services office.
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A special needs
trust is the only estate planning option that protects assets, enables the
beneficiary to receive goods and services from the estate, and still
preserves eligibility for government benefits. |
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