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Spend Down Explained

Also known as Excess Income or Surplus Income, this program is intended for those with an income slightly over the monthly income limit to qualify for Medicaid. It is intended for, and most beneficial to, those with high medical bills.

Here’s how it works: In the state of Washington for 2020, the income limit for full Medicaid benefits is $783 per month with a $20 disregard. This puts your allowable income at $803 per month. For simplicity, let’s say someone has an income of $903. That puts them $100 over the limit to receive Medicaid benefits. The most common Spend Down time period is 6 months which means you must multiply that $100 in excess income by 6 which makes your Spend Down amount $600. Similar to a deductible, you must meet that $600 Spend Down amount (on medical services only) before Medicaid will start covering medical bills again.

Medicaid will not pay for the bills used to reach the Spend Down amount. The person receiving those bills is responsible for them. However, once the Spend Down has been reached, then Medicaid will cover all future medical bills for the remainder of that time period. When that specific time period (usually 6 months) comes to an end, then your Spend Down will start over once again.

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Advocate Insurance Group is a company located in Seattle, WA, which specializes in helping people make informed decisions about their Medicare Coverage.

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