In Medicaid, a “spenddown” is the amount you must pay towards your medical bills before Medicaid will pay for them. This FAQ answers common questions people have about how a Medicaid spenddown works.

What is a Spenddown?

A spenddown is like an insurance deductible. If your income is more than the allowed income limit, you may still qualify for health care coverage by meeting a spenddown. A spenddown is the amount you must pay towards medical bills before the state will start to pay.

You must have medical bills to meet a spenddown. To meet your spenddown, you can use old medical bills that have not been paid, but you cannot use other household bills.

There are many types of spenddowns, such as monthly spenddowns or six-month spenddowns. A county worker will help you decide what kind of a spenddown is best for you.

How is my spenddown amount decided?

We figure the amount of your spenddown by subtracting your net income from the income limit. Your spenddown amount is based on many factors, such as your age and family size. The examples below will help you to understand how we figure spenddowns.

What is an example of a spenddown?

Your family’s income limit is $1,500 per month. Your counted income is $1,800 per month. Your spenddown amount is $300 per month ($1800 – $1500 = $300). You owe $300 towards medical bills each month.

How do I find out how much my spenddown will be?

You will receive a letter. The letter will tell you:

  • The amount of your counted income.
  • The income limit for your family size.
  • The amount of your spenddown.
  • If you can get medical coverage by meeting a spenddown.

How will I know who to pay my spenddown to?

You will get an Explanation of Medical Benefits (EOMB) each month. It will tell you:

  • What medical bills were used to meet your spenddown.
  • Who you must pay, and how much you must pay them
  • What bills have been paid by the State.

Can I avoid a spenddown?

Many people can protect a significant portion of their assets by working with an elder law attorney. Even if you have already started spending down your assets, you may be able to protect a significant portion of the remaining assets. In the world of Medicaid law, this is called “crisis planning.” Learn more about how to avoid losing everything to long term care costs.