Medicaid Medical Spend-Down Programs
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Some states have a system that allows people whose income is above the state limit for Medicaid to become eligible for it when their out-of-pocket medical expenses reach a certain level in a calendar year. This option is called a medical spend-down or medically needy program.
The states that run these programs have a variety of rules for eligibility, although it’s usually granted for only a limited period — for example, six months at a time — after which you may have to start the process all over again. This yo-yo effect happens because when receiving Medicaid, your own medical expenses naturally go down — to a point where you lose eligibility and have to run up more medical bills to qualify again.
Still, if you have Medicaid through one of these programs, most of your out-of-pocket Medicare costs are covered, at least for chunks of time. You also automatically qualify for full Extra Help — low-cost Medicare drug coverage that I explain later in this chapter. And after you’re in the Extra Help program, you continue to receive its benefits until at least the end of the calendar year, even if your Medicaid coverage runs out earlier.
To find out whether your state has a medical spend-down program, contact your local Medicaid office — call Medicare at 800-633-4227 (TTY 877-486-2048) for its phone number. Or call your SHIP.