What is a Medicaid spend down? Medicaid, also known as Title XIX, or MO HealthNet in Missouri, is a medical assistance program for low-income people who are elderly (65 years and older), permanently and totally disabled, blind or who meet some other category of eligibility. Some people have so little income that they automatically qualify for Medicaid. However, seniors and people with disabilities, whose incomes exceed the income limit, may qualify for Medicaid if they have “incurred” medical bills that equal or are greater than their “excess” income. The process of subtracting those medical bills from the individual’s income is called “spend down.” For example, a person over 65 is determined eligible for MO HealthNet benefits, but her monthly income exceeds the income limit for MO HealthNet non-spend down by $50. If she incurs medical bills of $50 in a month, the rest of her medical bills will be covered by MO HealthNet until the end of the month. The spend down in this case is the $50 of medical bills she incurs. Who can get spend down? Not everyone. A person must be permanently and totally disabled, blind or at least 65 years of age, have assets of no more than $4,000 if single, or $8,000 if married, and have income which exceeds the Medicaid limit in order to qualify for MO HealthNet spend down. Eligible people living in their own home, apartment, senior housing, congregate housing, etc. are eligible to be placed on a spend-down if they have income over the Medicaid limit. Individuals who are ineligible for vendor or HCB level of care due to a transfer of assets may be eligible for spend down. Individuals with income exceeding HCB income limit, currently $1,370 (changing to $1,388 in January 2021), may be eligible for spend down. How does spend down work? When you have incurred medical bills greater than your excess income, you will receive MO HealthNet coverage from the date you have incurred medical bills equal to or exceeding your spend down amount to the end of the month.. You are responsible for the bills up to the excess amount; MO HealthNet will only pay those bills over the excess amount. Title XIX also permits a State to have a program whereby an individual “pays in” his or her spend down requirement to the State (almost in the nature of a premium). This option, set forth in Section 1903(f)(2) of the Act, permits an individual to pay his or her spend down amount — i.e., the difference between their income and the medical assistance income level — to the State. If the State chooses to establish a pay-in program, as Missouri has, individuals may have a choice between the pay-in option and incurring expenses that will qualify them for MO HealthNet coverage for the month. What types of medical expenses count toward spend down? The bills must be ones which the participants owe for medical services or items for themselves or their spouse if their spouse’s income is counted in the spend down determination, which no other insurance or program is going to pay, for necessary medical services that are recognized under State law and are not subject to payment by a third party, unless the third party is a public program of a State or political subdivision of a State such as Department of Mental Health or Department of Health and Senior Services. Only expenses included in Section 208.152, RSMo can be used to meet spend down. In this section, personal care services are allowed at the state rate; this applies to all charges for personal care services including home health agencies. To “incur” an expense means to be personally responsible to pay for the expense. The Centers for Medicare and Medicaid Services (CMS) Handbook clarifies that the only medical expenses that may be allowed to meet a participant’s monthly spend down are those charges for which the participant is personally responsible. If a participant has a monthly spend down of $300, he/she must personally be responsible for $300 in medical expenses each month before his/her spend down is met. Third Party Payments for Spend-down Can third parties (specifically, providers) pay the spend-down amount to the State? The answer is no. The rules governing incurred expenses state that expenses must be “incurred by the individual or financially responsible relatives, and are not subject to payment by a third party” (unless the third party is a program of the State or one of its subdivisions). The problem with having a provider pay the spend-down amount is that, from CMS’s perspective, the Medicaid applicant’s income remains above the medical assistance level, because he or she has not incurred or paid expenditures that bring his or her income down to the Medicaid level. CMS therefore considers individuals whose spend-down has been paid by a third party not to be Medicaid eligible because he or she may not meet the spend-down requirement. Note that this is not a problem if the spend-down payment is made by a financially responsible relative on the individual’s behalf or if it’s made by a program of the State or one of its subdivisions. In either of those cases, the payment is treated the same as if it had been made by the individual. In the above situation, Medicaid could not reimburse the provider for the incurred expense, as that is the responsibility of the individual. Medicaid rules provide that “[e]xpenses used to meet spend- down liability are not reimbursable under Medicaid.” 42 C.F.R. 435.831(h)(5). Therefore, “[t]o the extent necessary to prevent the transfer of an individual’s spend-down liability to the Medicaid program, States must reduce the amount of provider charges that would otherwise be reimbursable under Medicaid.” Id. Documentation required for spend down. MO HealthNet Eligibility Specialists must obtain documentation of incurred medical expenses. This documentation will be reviewed to determine the accuracy of the invoice or billing statement. How much is spend down amount? The amount of spend down is the extra income that is over the limit to receive Medicaid automatically. The Family Support Division figures out this amount for each person, taking into account the person’s income and living arrangements. Currently the Net Income limit for Elderly and Disabled is 85% of the federal poverty level (Individual – $904, Couple – $1,166). The Net Income limit for Blind is 100% of the federal poverty level (Individual- $1,064 Couple-$1,472). The federal poverty level is adjusted annually. How often does a MO HealthNet participant have to meet spend down? The participant will have to meet the spend down every month unless his/her income and living arrangements have changed so much that he/she qualifies for MO HealthNet without a spend down. To receive MO HealthNet coverage in any month, the participant has to meet the spend down first. How do you know if you qualify for spend down? If you have been denied full coverage under the MO HealthNet for Aged, Blind and Disabled program, the notice MO HealthNet must send you will tell you if you qualify for spend down and, if so, the amount of your monthly spend down.