Medicaid Spend-Downs: What They are and How to Meet Them

Medicaid Spend-Downs: What They are and How to Meet Them
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Last updated: December 2013

For many people who cannot afford medical care, the Medicaid Spend-Down program in Illinois can help. The program is difficult to understand. Here are answers to some common questions about the program. However, to get answers about your own situation contact your local public aid office.

Note: the information that follows is general and is not meant to be legal advice for your specific situation. You should also know that this information applies only to Illinois residents, and only if you are at least 65 years old or have been found to be disabled by the Illinois Department of Human Services (IDHS).

What is a spend-down?

A spend-down is like a deductible under a regular insurance policy. Your spenddown amount is the amount of medical bills that DHS will not pay each month. You must have medical expenses that equal the spend-down amount before you get Medicaid coverage for your medical expenses just as you have to meet the deductible before insurance will pay. For example, if your spend-down amount is $50 per month, you are eligible for Medicaid for the month once you have medical expenses that total $50. Examples of medical expenses that can be used to meet your monthly spend-down include payment for medications, doctors visits, and blood tests.

What is Pay-in Spend-down?

In general, Aid to the Aged, Blind and Disabled (AABD) community MANG (Medical assistance no grant) clients also have the option to "pay" their spend-down amount each month. This is done instead of, or in addition to, submitting medical receipts. This "Pay-in" option may help you by:

  • allowing you to pay ahead of time to make sure you receive your medicaid card at the beginning of the month;
  • letting you choose for which months you get a medicaid card; and
  • not making you keep track of bills and receipts, and then send them to your case worker.

To enroll in the Pay-In Spenddown program, fill out the form at your local DHS office or call 1-800-226-0768. Being enrolled does not mean you have to make a payment. It means if you choose to make a payment to meet spenddown, you can.

You can pay-in your spenddown amount for one, two, or three months in advance. You choose the months you pay for. For example, if you know you are going to have surgery in January and your spenddown is $44 a month, you can pay-in the $44 in December and receive a medical card for January. Or if your medical bills are more than your spenddown amount every month, you can pay-in the spenddown amount the month before and have days to submit bills for payment. After medical providers are paid, refunds will be sent. 

For more information, see Pay-in Spend-down on the IDHS website.

Does having a spend-down mean that I am ineligible for Medicaid?

No, you are eligible for Medicaid when you meet your spend-down amount for the month. Medicaid will pay for medical expenses over and above your spend-down amount, for every month in which you meet your spend-down. It is possible receive Medicaid benefits one month but not the next depending on your medical expenses in each month.

Why do some people have a Medicaid spend-down while others do not?

Spend-down is based on your income and assets. If your income or the value or your assets is below the monthly income maximum for Medicaid eligibility, you will not have a spend-down. If your income or assets are above the limit, you you will have to meet the spend-down amount for the month before you are eligible for Medicaid benefits for that month.

How is my spend-down calculated?

The amount of your monthly spenddown depends on your income and assets. Your local DHS Family Community Resource Center (FCRC) will send you a special notice telling you the amount of your monthly spend-down and how this amount was figured.

How do I meet my spend-down amount?

There are 3 ways to meet your spenddown:

  • You can use medical bills and receipts
  • You can “pay-in” the amount of your spenddown
  • You can use some medical bills and receipts and pay-in the rest

You meet the spend-down amount by having medical bills that equal your spend-down amount. You don't need to pay the bills to have them count toward your spend-down. The bills can be old or recent. All bills must:

  • Have a billing date within the last 6 months. If you still owe on an older bill, ask the doctor to re-bill you, and you can use it to meet spenddown\
  • Only be used one time to meet spenddown
  • Not be covered by insurance. Any part of a bill that an insurance company has refused to pay can be used to meet spenddown.

Get copies of all medical bills and get receipts for prescription drugs. Ask for and keep receipts for your transportation expenses to and from medical appointments. You need to show your bills to your caseworker at the Department of Human Services, it is very important for you to keep them together where you will be able to find them. When your bills equal your spend-down amount, give copies of them to your caseworker at the Department of Human Services office, so you can get a medical card.

Can I use an old medical bill to meet my spend-down?

Yes, if the bill is for services or medications is from the past six months. Even if the bill is more than six months old, you can count it toward your spend-down if you still owe it, and haven't used it toward spend-down before. You can only use an old bill once. If it is older than six months and you still have not paid it go to the medical provider (your doctor or your pharmacy, for example) and ask the provider to re-issue the bill to show that you still owe it.

Should I give my medical bills to my caseworker as soon as I get them?

Yes, but you need to tell the caseworker how to apply the bills. You can choose to apply the bills to meet the spend-down in the current month, a past month or a future month. You should apply the bills to the month or months that give you the most medical assistance.

Let's assume you have that you have medical bills that meet your per month spend-down on January 15th. Here are your options:

Apply the Bills to the Current Month

If you tell the caseworker to apply the bills to January, you will get a medical card for January. However, because a medical card is only valid for one month and it is already January 15th, you will obtain the benefit of the medical card only for the 16 days remaining in January. This might be a very good choice you if you have an expensive medical treatment scheduled for later in January. Or, you may need refills on medications and have no other money to pay for them, and must make this choice to be sure to get needed medications. 

Apply the Bills to a Future Month

If you tell the caseworker to apply the bills to February, you will receive a medical card starting February 1. This is a good choice if you have medical treatments, doctors visits,  surgeries or expensive prescriptions for medicines to be filled in February.

Apply the Bills to a Past Month

If you had a large medical bill in past month, like a hospitalization in December, that is more than the spend-down amount, you can ask that the spend-down be met for December to pay off that bill.

What if my medical expenses are more than the amount of my spend-down?

Again, there are several options. The best one for you depends on your individual situation:

Get Help with Paying the Bill

If you have a bill for $425 for an emergency room  visit on January 3. You can use the first $72 of the bill to meet your spend-down for January, and ask that Medicaid pay the remainder of the bill. You will be responsible only for $72 of the emergency room visit  bill, and will then have Medicaid eligibility for the rest of January. 

Use the Bill to Meet More than One Month of Spend-down

If your goal is to meet your spend-down for the current month and later months, you can "split" the bill.  You can "carry over" the remainder of the bill to meet your spend-down in future months. Remember you will need to update the bill after 6 months. This is a good choice if you have ongoing medical expenses. 

What types of expenses can I use to meet my spend-down?

You can use bills for medical care from doctors, hospitals or clinics, some dental services and most in-home care services. You may use bills for drugs, including over the counter drugs, if they are prescribed by your doctor. You may use any health insurance or Medicare premiums, co-payments or deductibles. You may also use the cost of your transportation to get medical care.

Should my spend-down case be terminated because I didn't meet my spend-down?

Illinois follows a policy to cancel all spend-down cases where the spend-down has not been met for three months in a row. That should not discourage you from re-applying when you have enough bills to meet your spend-down.

Where do I apply for Medicaid?

Apply at your local Department of Human Services Office. Click on the link below to find the office that serves the area in which you live.

Department of Human Services Office Locator

What do I do if I disagree with my spend-down?

If you disagree with a decision from the Department of Human Services about your spend-down, you have the right to appeal the decision. The most reliable way for you to file an appeal is to ask your local  office for a "Notice of Appeal" form, complete the form and submit it at the local office. You may also file an appeal by calling (800) 435-0774. There is a time limit for appeals, you have only 60 days from the date of a decision or notice to file an appeal.

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