5-05

Medically Needy Health Care Plan
(Spenddown)

The Medically Needy Plan offers coverage to people who have income over the limit for a regular medical program. In the Medically Needy plan, excess income is considered for health care costs. The amount of excess income becomes the ‘spenddown’. The spenddown is the person’s or family’s share of the medical cost. A spenddown is much like an insurance deductible. The spenddown (deductible) must be met before medical bills are covered.

Who can get Medically Needy or spenddown coverage?
A spenddown can be set up for people in the following groups:
• Pregnant Women
• Children under the age of 19
• Seniors age 65 and over
• Persons determined disabled by Social Security

For pregnant women and children, there is no asset test. For seniors and people with disabilities, there is a limit of $2000 for singles and $3000 for couples.

How much is the spenddown?
The spenddown is different for every person or family. It is based on countable income. The amount of countable income is compared to the standard limit. The rest is for spenddown. The standard limit and the income varies:

For the elderly and people with disabilities, the monthly spenddown income limit is $495.00 for one or two people and $500 for three people. For adults, only the income of the person needing coverage and their spouse is used. For minors, the parental income is also used. The income of other people in the home isn’t considered.

For children, the spenddown income limit is $475.00 for one or two people and $480.00 for three people. The income of the children and the parents who live with them is used.

For pregnant women, the spenddown income limit is $475 for two people and $480 for three people. The income of the woman and the father of the baby, if living with the mother, is used. An allowance is also given for the baby, so a household size of two or three is applicable.

Extra disregards are given for earnings or wages. For seniors and people with disabilities, over half of the wages are not counted. For pregnant women and children, $200/month for each wage earner is not counted.

How long is the spenddown?
The spenddown period is usually six months. The spenddown starts when you apply.


EXAMPLE 1: A 70 year old person with $795.00/ month in income applies on June 2, 2005:

• His spenddown period is 6 months and runs from June, 2005 - November, 2005.

• His spenddown is figured by $795.00 - $495.00 = $300.00 spenddown a month.
$300.00 x 6 months = $1800.00 total spenddown.

EXAMPLE 2: A pregnant woman living with her husband. She makes $1000/month and he makes $2000/month. They apply on August 4, 2005.

• Her spenddown is 6 months from August, 2005 - January, 2005.

• Her spenddown is figured by looking the monthly income, in this case $3000/month. Because the income is from wages, $400.00 a month isn’t counted. ($3000 - $400 = $2600). Then, the countable income is reduced by the protected limit ($480 for a family of three). The spenddown is $2600-480 = $2120/month. For six months, the spenddown is $12,720.

How does the spenddown process work?
We send a medical card for each person on the Medically Needy plan. The medical card does not pay any medical expense until the person meets his or her spenddown. Medical providers bill the medical card to meet the spenddown. After the person meets the spenddown , the medical card pays covered medical expenses during the spenddown period.

What expenses can be used to meet a spenddown?
You may use most of your own and your spouse’s expenses. Parents may also use bills for minor children. Some of these expenses include doctor, hospital, dental, vision, hearing, prescriptions and transportation to get medical care. We can also use premiums you pay for health insurance and Medicare as well as old medical bills you still own, some over the counter drugs and medical supplies ordered by a doctor. You cannot use the part of the bill that Medicare or other insurance already paid.

What happens when the spenddown is met?
Once the spenddown has been met, covered medical expenses may be paid. The expenses used to meet the spenddown remain your responsibility. A new spenddown begins once you reach the end of the first spenddown period.