Legal Definitions - Spend down

Spend down

Spend down is a way to qualify for Medicaid if your income is slightly higher than the income limit. To be eligible for Medicaid, your income must be below a certain level. Spend down allows you to spend the extra income on medical bills and become eligible for Medicaid. You can use the extra money to pay for your own, your spouse's, or your children's current and past medical bills. For example, if your income is $100 over the limit, you can spend that $100 on your prescription drugs and then qualify for Medicaid.

John's monthly income is $1,200, and the income limit for Medicaid is $1,100. John can't afford to pay for his medical bills without Medicaid, so he decides to use the spend down strategy. He spends $100 on his past medical bills, and now his income is $1,100, which is below the Medicaid income limit. John can now apply for Medicaid and get the medical care he needs.

This example illustrates how spend down works. John had income that was slightly above the Medicaid limit, but by spending the excess money on medical bills, he was able to become eligible for Medicaid.