This article is a section taken from MA for People Who Are Age 65 or Older or People Who Are Blind or Have a Disability (MA-ABD), a part of the revisions and additions to the Minnesota Health Care Program Eligibility Policy Manual.

Health Care Expenses

To be eligible for Medical Assistance (MA) with a spenddown, people may reduce excess net income by deducting allowable health care expenses that are not subject to payment by a third party.

The person, or one of the following family members, can incur the health care expenses:

  • Spouse if the spouse’s income is used to determine the person’s eligibility
  • Legal dependents if they are included in the person’s family size or would have been included when the bills were incurred
  • Siblings, half-siblings, and step-siblings who are included in the person’s family size
  • Parents or stepparents who live with the person if their income is actually used to determine the person’s eligibility or they are included in the person’s family size

The family members do not have to be applying or eligible for MA to use their health care expenses to meet the spenddown of the family member applying for MA with a spenddown.

Allowable Health Care Expenses to Meet a Medical Spenddown

Allowable health care expenses include:

  • Paid or unpaid bills incurred in the current spenddown period
  • Unpaid bills incurred before the current spenddown period

Payments from a health savings account (HSA) funded by the person are not considered third-party payments.

Health care expenses incurred before the spenddown satisfaction date are not eligible for MA payment.

Types of Health Care Expenses

Allowable health care expenses are deducted from the spenddown in the following order:

1. Health insurance expenses incurred during the current six-month period. This includes:

  • Health, dental and long-term care (LTC) insurance premiums
  • Indemnity policy premiums that reimburse health care expenses
  • Medicare premiums
  • Medical Assistance for Employed Persons with Disabilities (MA-EPD) obligations
  • Co-pays
  • Deductibles, including MA family deductibles

2. Unpaid health care expenses that the person is still obligated to pay and that were incurred before the six-month period.

  • The healthcare expense may be:
    • An expense charged directly to the person by a medical provider
    • An expense that a medical provider has transferred for collection to a person or agency actively pursuing the collection
    • A loan payment owed to a person, financial institution, or credit company for which the loan proceeds are paid to a medical provider. Interest and service charges applied to a loan are not a health care expense.
  • The healthcare expense cannot have been:
    • Used to calculate a spenddown during a prior certification period, whether or not the calculation resulted in the spenddown being met. Except the expense may be used to meet another spenddown if eligibility for the entire certification period was denied.
    • An MA-covered service incurred in a prior certification period of MA

3. Non-reimbursable health care expenses that are not covered by MA, incurred during the current six-month period, including:

  • MA co-payments
  • Non-reimbursed Health Care Access Services
  • Health care expenses for dependents or financially responsible relatives who are not eligible for MA
  • A remedial care expense for people living in a residential living arrangement and there is a Group Residential Housing (GRH) agreement with the county agency
  • Alternative Care (AC) costs
  • Expenses paid by the Insurance Extension Program that pays health insurance premiums for individuals who are HIV positive

4. MA-covered services received during the current six-month period that will be paid by MA, including:

  • Waiver services received through a home and community-based services waiver
  • Personal care attendant (PCA) services
  • Targeted case management services

Reporting Health Care Expenses

People must report and verify all health care expenses used to meet a medical spenddown, except for the remedial care expense.

Legal Citations

Code of Federal Regulations, title 42, section 435.831
Minnesota Statutes, section 256B.056, subdivision 5

CREDIT: The content of this post has been copied or adopted from the Minnesota Healthcare Programs Eligibility Policy Manual, originally published by the Minnesota Department of Human Services.

This is also part of a series of posts on Minnesota Healthcare Eligibility Policies.