The good news?

With the right Medicaid billing steps, it soon becomes routine.

Whether you run a solo office, work in a group practice, or just joined a Medicaid plan, you need a clear roadmap for the entire process.

This guide from BellMedEx gives you exactly that.

What Is Medicaid?

Medicaid is a health program jointly run by the federal and state governments in the U.S. It now covers more than 80 million people, including:

• Children
• Pregnant women
• People with disabilities
• Low-income adults
• Seniors who also receive Medicare (known as “dual eligibles”)

Why Should Healthcare Providers Treat Medicaid Patients?

Many providers worry that Medicaid pays less than private insurance or Medicare. Still, three major reasons make it worth considering:

Large patient pool – Medicaid covers a fast-growing segment of the population, especially in underserved areas.

State-level incentives – Some states offer extra perks like value-based payments or higher rates for specific specialties.

Community impact – You’re helping some of the most vulnerable people. That service brings lasting value to your community.

Here’s How to Bill Medicaid as a Provider:

Here’s a full breakdown of how to bill Medicaid successfully, from credentialing to getting reimbursed.

Step #1 – Enroll as a Medicaid Provider

You can’t send a single reimbursement claim to Medicaid until the program adds you to its roster. Therefore, your first job is getting on that list.

Think of it like joining the payroll before payday.

a). Find your state’s portal

Every state runs its own enrollment portal, and they all live on official .gov pages. A quick search for “[Your State] Medicaid provider enrollment” on Google will land you on the right link.

For example:

• In Texas, you’ll use TMHP (Texas Medicaid & Healthcare Partnership).
• In California, it’s PAVE (Provider Application and Validation for Enrollment).

If the web address doesn’t end in .gov or belong to a well-known state partner, then don’t trust it.

b). Collect the paperwork before you log in

Have these items ready before you start the Medicaid provider enrollment form:

c). Complete the online application

• Log in or create an account on your state’s portal.
• Follow each screen. Upload documents as asked.

If a field stumps you, most portals have a help line or live chat—so use it. You can also call the state’s Medicaid provider relations office, as that team’s entire job is guiding newbies like you through enrollment.

d). Let the state verify you

After you click Submit, the state reviews your file. This “Medicaid credentialing” step checks licenses and other data.

• Time frame is usually between 30 to 90 days.
• Faster for solo providers.
• Slower if you enroll a new group practice.

Once approved, you’re ready to send Medicaid claims and get paid as a healthcare provider.

Step #2 – Verify Patient Eligibility Before Each Visit

Eligibility verification simply means you confirm, ahead of time, that Medicaid still covers your patient and the service you plan to provide. A quick check spares you from most “patient not eligible” denials.

a). First, pick the method that fits your day:

• State Medicaid portal: Log in, type the patient’s Medicaid ID or birth date, and you get an instant “yes” or “no.”
• EHR or clearinghouse tool: Many systems ping Medicaid in real time. If coverage has lapsed, you’ll see a pop-up before the patient arrives.
• Medicaid helpline: A phone call takes longer, yet it helps when the portal is down or the data looks odd.

b). When you run the check, look for four things:

1. Confirm active coverage for today. Benefits can end quickly if a patient’s income changes or renewal paperwork is delayed.
2. Review service limits. Office visits are usually covered in most states, but extras—such as dental, vision, or chiropractic care—may have caps or require prior approval.
3. Check for a managed care plan. Many Medicaid members belong to an MCO. If you see “Molina,” “UnitedHealthcare Community Plan,” or another HMO name, send the bill to that plan—not directly to the state.
4. Look for other insurance. Third-party liability (TPL) means the patient has private insurance too. Medicaid pays last, so you must bill the other plan first, even if it only covers part of the charge.

Step #3 – Confirm That Medicaid Covers the Service

You have your Medicaid ID. You’ve checked the patient’s eligibility. One last check keeps your claim safe: make sure the service itself is on your state’s covered list.

When we say “make sure the service is on your state’s covered list,” we mean this: look up the exact CPT or HCPCS code for the visit, test, or procedure you plan to bill. If that code isn’t shown as covered in your state’s Medicaid fee schedule—or if it needs prior approval—you risk a denial.

Here’s how to see what Medicaid will pay?

a). Open your state’s fee schedule

Search for “Your State Medicaid fee schedule 2025.” Look for a PDF or spreadsheet on a .gov site.

b). Scan the CPT or HCPCS codes you plan to use

The schedule shows:

• Whether the code is covered
• The dollar amount Medicaid pays
• Any limits, such as age caps or visit counts
• Whether prior authorization is required

Example: North Carolina allows up to 30 physical therapy visits a year. Another state might allow only 15—or none, unless the patient is under 21.

c). Check plan bulletins for updates

States post monthly or quarterly alerts. A code that paid last year may need approval today.

d). Call the authorization desk when in doubt

A five-minute call beats a denied claim.

Step #4 – Secure Prior Authorization When It Counts

You have the patient’s Medicaid card on file, you know the service is on the covered list, and you’re ready to book the test.

Great…

but hold on a moment!

Some services need prior authorization (PA) before you provide them. Getting that green light is the difference between a paid claim and a painful write-off.

➜ Spot the usual PA suspects

As a rule of thumb, if a service is pricey, ongoing, or ordered by a specialist, plan on requesting a PA:

• High-cost imaging: MRI, CT, PET
• Elective surgeries: tonsillectomy, joint replacement, bariatric procedures
• Therapy past routine limits: mental-health counseling, speech, PT, OT
• Durable medical equipment (DME): power wheelchairs, hospital beds
• Ongoing home-health or skilled-nursing visits

Quick example:

Your patient with chronic knee pain clearly needs an MRI. You open the Medicaid HMO’s PA list and, sure enough, the scan needs approval. Rather than gamble on reimbursement, you pause, submit the request, and wait for the go-ahead.

➜ A simple roadmap for requesting PA

a). Choose the right portal

Every state—or Medicaid HMO—runs its own PA system. Some accept secure online forms; others still rely on fax. Therefore, you need to pick the path the healthcare payer prefers.

• Fill in the nuts and bolts
• CPT or HCPCS code for the service
• ICD-10 code that backs up the medical need
• Provider and facility info
• Target date of service

b). Attach proof of need

Your clinical notes, past imaging, lab results, or a referring specialist’s letter strengthen the request. Think of this bundle as answering the question, “Why does this patient need this service right now?”

c). Send, then track

Most plans give a decision within a few business days, sometimes sooner if you flag the case as urgent. Log the submission date and reference number so no one has to guess where the request stands.

d). After you hear back

• Approved. You’re free to schedule the service. Save the approval letter or confirmation number in the chart and billing file.
• Denied. Read the reason line by line. Many denials stem from missing paperwork or the wrong diagnosis code, both fixable on appeal.
• Need more info. Plans may ask for clearer notes or an extra test result. Provide what they need and resubmit; no need to start from scratch.

Step #5 – Submit Your Medicaid Claim

You have checked the patient’s coverage, confirmed the service is allowed, and grabbed any prior approval you need. Nice work. Now let’s make sure you actually get paid.

a). Pick the right claim form

• CMS-1500. Use this for office visits, shots, labs, or any other professional service.
• UB-04. Use this when you bill as a facility—hospital stays, outpatient surgery, skilled-nursing care.

Even if you hit “submit” inside your EHR, these forms sit behind the scenes. The software fills them in for you.

b). Drop in the correct codes

• ICD-10 tells Medicaid why you treated the patient.
• CPT or HCPCS show what you did.
• Modifiers add detail. For a flu shot given during a check-up, list:
  • 99213 – office visit
  • 90686 – flu vaccine
  • 90471 – vaccine administration
  • -25 on 99213 to prove the visit was separate from the shot.

c). Add a Place-of-Service (POS) code

This code shows where the care happened. A few you’ll use often:

• 11 – office
• 22 – outpatient hospital
• 12 – home
• 31 – skilled-nursing facility

Check this code twice. A wrong POS is a top reason claims bounce back.

d). List the right NPI numbers

• The rendering provider NPI must match the person who gave the care and must match the NPI on file with Medicaid.
• If you bill as a group, add the group NPI too.

e). Choose how to send the claim

• Through your EHR or practice management software. Fastest. The system fills the claim and flags missing data before you hit send.
• Through a clearinghouse. Acts like a mailroom: it scrubs errors, then routes the claim to the correct Medicaid payer.
• Direct upload to the state portal. Handy if you bill only now and then or do not have an EHR.

f). Track the claim afterward

Submitting is only half the job. Log back in a few days later and look at:

• Status – pending, paid, or denied
• Payment amount – matches your fee schedule?
• Remittance advice (RA) – explains reductions or denials

Catching a denial early often means a quick fix rather than a drawn-out appeal.

Step #6 – Track Each Claim and Match Every Dollar

Submitting the claim is only halftime. To get paid in full, you still need to watch the claim move through the system and confirm the deposit hits your account. A little follow-through here prevents big revenue leaks later.

a). How to keep eyes on your claims

➜ State Medicaid portal

Log in, search by patient or claim number, and read the status line: submitted, pending, paid, or denied.

➜ Clearinghouse dashboard

Tools like Availity or Office Ally show real-time updates—when Medicaid received the claim, whether it passed edits, and when it heads to payment.

➜ Remittance advice (RA) or EOB

This document tells you what was paid, reduced, or refused and why. Review it line by line as soon as it arrives.

b). Denials that pop up most

• Bad patient data – a wrong Medicaid ID or mistyped birth date can sink the claim.
• Coverage gap – the patient was not eligible on the service date.
• NPI or Tax ID mismatch – your claim info does not match Medicaid’s enrollment file.
• Missing prior authorization – the service needed approval, but no PA number was on the claim.

c). Reconciling payments the smart way

• Match every deposit to the specific claim in your billing system.
• Flag under-payments at once—was it a contract adjustment or an avoidable denial?
• If you need to appeal, move fast; many Medicaid programs close the window after 90 days.

Step #7 – Fix and Resubmit Denied or Rejected Claims

A denial is normal. It just means something on the claim needs a quick edit. Most states let you correct and resend—as long as you do it within their time limit (often 90–180 days from the date of service).

a). Read the denial note

Look at the Remittance Advice, EOB, or your portal. Find the short code that tells you what went wrong.

• CO-16 – missing or wrong info
• PR-49 – patient not eligible that day
• CO-96 – wrong code or modifier
• CO-109 – service not covered

b). Fix the problem

• Correct any typos in the patient name, Medicaid ID, or date of birth.
• Add the right modifier (-25, -59, etc.).
• Swap in the correct diagnosis or procedure code.
• Include the PA number if you left it off.

If the denial is about medical need, attach your notes or test results to show why the service was required.

c). Resend the claim

Use the same route you used before—portal, clearinghouse, or EHR. Mark it as a corrected claim if your state asks for that. Some states want the original claim number or a resubmission code (often “7” for a replacement claim).

d). Watch the deadline

Send the fix before the timely-filing window closes. If you are already past it, file an appeal right away and explain why you could not meet the deadline (for example, a system outage or mail delay).

e). Keep a simple denial log

Write down each denial in a list:

• Patient name and service date
• Denial reason
• Date you fixed it
• Date you resent it
• Final result

Seeing the patterns helps you prevent the same mistake next time.

Since each state has its own rules, it’s best to call your local Medicaid office to find out what expenses they accept. Or you can also book a FREE consultation with us at BellMedEx to understand Medicaid spend down rules in your state and get help checking if your patients qualify.

What Expenses Qualify for Medicaid Spend Down?

When applying for Medicaid, you must spend down your assets to meet eligibility requirements. You can do this by paying for medical bills and other allowed expenses that Medicaid covers. How Medicaid spend down works depends on each state.

Here are the most common and allowable expenses for Medicaid spend down.

1. Medical Care & Equipment and Supplies

Medicaid spend-down can cover medical care and equipment not usually included by other insurance. This covers items like eyeglasses, dentures, hearing aids, and prosthetics, as well as medical supplies such as bandages and medications. These items must be medically necessary and prescribed by a healthcare provider.

2. Prepay Funeral Expenses

Medicaid helps individuals prepay funeral expenses through a funeral contract or burial trust. This can cover irrevocable and non-refundable burial costs, cremation services, and other funeral-related expenses. But, states may limit how much you can spend, and any leftover funds will revert to the state if not used.

3. Debt Repayment

Paying off legitimate debts, like mortgages, credit card balances, or car loans, counts as a Medicaid spend down expense. You can make both full and partial payments for debt repayment. Prepaying future debts is also allowed if you are obligated to repay them.

4. Nursing Home Care

One of the most common expenses for Medicaid spend down is nursing home care. This includes paying for short-term or long-term stays in nursing homes or other qualified personal care attendants and home health aids.

5. Health Insurance Premiums

Paying for health insurance premiums counts toward your Medicaid spend down. This can include premiums for private health plans, long-term care insurance, or other medically necessary coverage. Medicaid will allow these payments to be deducted from your total assets.

6. Home Improvements for Accessibility

Home improvements may qualify for Medicaid spend down if you need to modify your home for medical reasons. This includes installing wheelchair ramps, widening doorways for wheelchair access, or adding grab bars.

Repairs for home safety and accessibility are also covered in most states. These include fixing plumbing, repairing roofs, and dealing with safety hazards. However, general home renovations are not covered.

7. Co-pays and Deductibles (Medical Bills)

You can use Medicaid spend down to pay medical bills, whether paid or unpaid. This includes co-pays, deductibles, and outstanding balances for medical services already received. These are out-of-pocket expenses you must pay under your health insurance plan before Medicaid starts covering the remaining costs.

8. Chiropractic Services

Medicaid covers chiropractic services if they are medically necessary and prescribed by a doctor. This includes treatments for conditions like back pain or other musculoskeletal issues that require chiropractic care.

9. Medicaid-Compliant Annuities

Buying a Medicaid-compliant annuity can convert assets (including lump sum of money) into a steady income stream. This strategy works well for married couples. But, the annuity must meet state and federal requirements. For example, the annuity must be non-transferable, and the state must be named as a beneficiary.

10. Life Care Agreements

A Life Care Agreement helps you to hire a family member or trusted person for providing long-term care. The contract must be legally drafted, and payments must be reasonable. Avoid prepaying for healthcare services that haven’t been provided yet, as this could result in Medicaid ineligibility.

11. Transportation to Medical Services

Medicaid spend down funds can fix or replace an old car needed for medical visits. Expenses for rides to doctor’s appointments or medical treatments also qualify for Medicaid spend down.

FAQs About Allowable Expenses for Medicaid Spend Down

How do I qualify for a Medicaid spend down?

You may qualify for a Medicaid spend down if you have high medical expenses or if your income exceeds the Medicaid limit for your state. For example, Medically Needy Pathway restricts the eligibility to people aged 65 or older, those with disabilities, or the blind. States also consider the number of people in your household and local cost of living when determining eligibility.

What counts as income for Medicaid spend down?

Income includes any money you receive regularly, such as Social Security payments, pensions, disability benefits, and earnings from a job. In addition, Medicaid may consider interest from savings accounts, dividends from investments, and other financial resources in determining your eligibility.

What happens if I don’t spend enough income during my spend-down period?

If you don’t spend enough to meet your state’s income limit, you could temporarily lose Medicaid coverage until the next period. Work collaboratively with a Medicaid caseworker to track expenses and avoid gaps in coverage.

Can I use Medicaid spend down to pay for regular household expenses?

No, Medicaid spend down funds must be spent on qualified medical expenses or necessary services. Regular household expenses like rent, utilities, and groceries do not qualify. Spending down must focus on medical-related costs.

How long do I have to spend down my income?

The time frame for meeting your spend-down goal varies by state, but it generally lasts between one and six months. During this period, you must spend the excess income on medical expenses. Once you meet the required amount, Medicaid can begin covering your healthcare costs.

But for elderly folks living hand to mouth on meager pensions or social security, healthcare expenses can be an unbearable burden.

Medicaid aims to lift that burden!

This federal program provides medical insurance to those who can’t otherwise afford it.

For millions of senior citizens, Medicaid is a source of relief that allows them to seek treatment without fear of financial ruin.

Is Medicaid’s Spenddown Right for Americans?

For Americans struggling to afford healthcare, Medicaid can be a lifeline. Medicaid provides health coverage for those with limited income and resources.

However, many hardworking Americans find themselves in a cruel catch-22, making too much money to qualify for Medicaid but not enough to pay for expensive medical care and insurance premiums.

Fortunately, some states offer Medicaid spenddown programs. These programs allow individuals to deduct certain medical expenses from their income, potentially making them eligible for Medicaid. By paying for things like prescription drugs, doctor visits, and hospital stays out of pocket, individuals can essentially “spend down” their excess income to Medicaid-qualifying levels.

What is meant by “Medicaid Spenddown”?

The government aid program Medicaid has certain eligibility criteria based on an individual’s income and assets. For those whose income exceeds the threshold set by Medicaid, there exists a mechanism called the “Medicaid spenddown” which provides a path to qualify for coverage.

As the name suggests, the Medicaid spenddown requires an individual to spend down their income on medical expenses to reach the Medicaid eligibility limit. For example, an elderly diabetic person earning $1,400 a month faces a Medicaid income limit of $1,200. By spending $200 per month on insulin, test strips and other such necessities to manage the condition, the person’s income reduces to the $1,200 limit, making them eligible for Medicaid.

Things to know about the Medicaid Spenddown policy

A person’s monthly income often ends up exceeding the maximum limit set by the state to qualify for Medicaid benefits. To become eligible, individuals have to find ways to spend the excess amount. This process is known as “spending down” and it works as follows:

Each month, a person can reduce the amount of income counted towards Medicaid eligibility by paying out of pocket for necessary medical expenses.

Things like doctors’ visits, hospital bills, prescriptions, and treatment can all count towards spending down the excess income.

Keeping detailed records of all medical expenses is critical, so individuals should save every receipt and bill to provide as proof to the state Medicaid office that the excess income has been spent.

Spending down one’s income to meet the Medicaid limit can be challenging to keep track of, but with diligent record-keeping and persistence, it is possible to become eligible for Medicaid coverage.

Once a person’s excess income has been spent down to reach the Medicaid threshold, they will qualify for benefits. However, if their income continues to surpass the limit in subsequent months, the spending down process will need to be repeated to maintain eligibility.

In short, by using out of pocket medical costs to offset income that exceeds Medicaid limits, people who otherwise earn too much to qualify can become eligible for benefits. With organization and patience, spending down provides a pathway for those stuck between affordable healthcare and making too much to receive government assistance.

Do you know? California has taken great and significant initiative in expanding Medicaid access by eliminating the asset test for all of its healthcare supporting programs. This means Californians are more likely to qualify for Medicaid regardless of their income and asset limit.

What are the types of Medicaid Spenddown?

To qualify for Medicaid, a person’s income and assets are taken into account. Depending on each individual’s particular circumstances, you may have to reduce either your income, your assets, or both to meet the eligibility criteria. Medicaid spenddown refers to the process of lowering your income and assets to qualify.

Here are the main types of spend downs in Medicaid:

1). Income Spenddown

Income spenddown is a means for seniors whose monthly income exceeds their state’s Medicaid limits to become eligible for benefits. Though their income is too high under normal circumstances, by spending a portion of it on medical expenses they can “spend down” to Medicaid’s required level.

They can spenddown their income on medical bills, like:

• Physicians visits
• Unpaid medical bills
• Prescribed drugs
• Health insurance premiums

For example, take an elderly man in Florida with a monthly income of $3,000 in 2024. Florida’s Medicaid income limit that year is $2,829. That means the man has earned $171 over the limit. To qualify for Medicaid, he must first spend that $171 on medical bills and prescriptions. Once he does, he meets the income requirements.

Do you know? Some states permit applicants to place excess income into a Qualified Income Trust, also called a Miller Trust. The money above Medicaid’s cap goes directly into the account monthly. It covers the senior’s medical costs and long-term care expenses.

2). Asset Spenddown

Asset Spenddown means that if an elderly person or a married couple owns assets above the Medicaid limits, they are not outside the circle of people who can receive Medicaid benefits. Though not all assets are counted in determining Medicaid eligibility, for instance, a single vehicle for everyday use is totally exempt. To qualify for Medicaid, individuals must meet income and countable asset spenddown criteria.

It is important to remember that careful planning plays an essential role in avoiding penalties since Medicaid reviews asset spending over a lookback period.

For example, there was an elderly woman living alone in New Jersey. The Garden State had a limit of $2,000 in countable assets for long-term care Medicaid. This woman, a Ms. Jones, had $30,000 tucked away in her savings account.

The money was earmarked for her golden years, but Ms. Jones took ill and required in-home care.

She spent $28,000 of her savings on renovating her home to be wheelchair accessible – installing ramps, widening doorways, adding a first-floor bathroom. This brought Ms. Jones below the $2,000 asset limit, thereby making her eligible for Medicaid coverage for her long-term care needs.

Here is a complete table for US assets limits that can vary on the basis of state.

Countable and Uncountable Assets in Medicaid Spend Down

Countable assets are the resources a person has that can be used to pay for their own medical care. These are the assets that are counted when determining if someone meets the income limits to qualify for Medicaid. For example, a savings account with $5,000 would be considered a countable asset.

Uncountable assets, also called exempt assets, are not counted when determining Medicaid eligibility. These are assets that are excluded from the calculations. A person’s primary home, for instance, would be considered an uncountable asset. Even if the home is worth $500,000, it would not impact the Medicaid eligibility determination.

Medicaid Eligibility Income Chart (Updated May 2024)

The table mentioned below shows Medicaid’s income limit for seniors. Income is not a single factor for Medicaid eligibility, asset limits also have a role in determining eligibility.

Here we have mentioned three states which have complete Medicaid eligibility criteria.

Click here to get eligibility criteria of any other state.

For Alabama

For California

For Florida

What’s the Medicaid Spend Down Period?

The Medicaid Spend Down Period is the time frame some states provide for folks whose income is too high to qualify for Medicaid coverage, so they can lower that income by paying for medical bills. During those months, usually one to six, a person spends their money on doctor visits, prescriptions, and other healthcare costs until their income reaches the Medicaid eligibility level.

For instance, say a state gives two months to spend down – a man with high medical bills could pay those off in that time and qualify for Medicaid.

To qualify for Medicaid throughout the spend down tenure, people must consistently meet the spend down necessities each month. A single mother living in Connecticut working part-time earns $2000 per month. Her state’s Medicaid income limit is $1600. She must spend down $400 on co-pays, prescriptions, medical bills, and other medical care within 6 months to qualify for Medicaid.

What if people don’t spend down enough income?

Individuals who fail to effectively spend down their income within the nominated timeframe may face a  challenge of temporary loss of Medicaid coverage. This can create noteworthy monetary hardship and gaps in healthcare access.

To resolve this complex situation, individuals can seek assistance from their local State Insurance Assistance Program (SHIP). SHIP offers Medicaid counseling services, helping people recognize and manage their healthcare coverage opportunities.

However, keeping a record of  the  expenses and ensuring compliance with Medicaid’s spenddown requirements can be overwhelming for many people. The monetary backlash due to errors or misinterpretations can be severe, highlighting the need for cautious planning and professional guidance.

Healthcare expenses that qualify for Medicaid Spenddown

To determine Medicaid eligibility, it’s critical to recognize which healthcare expenses qualify for spenddown. These typically include:

• Personal medical bills that encompass a varied range of healthcare costs experienced by the individual seeking Medicaid, such as doctor visits, prescriptions, hospital stays, medical tools and others.
• Spouse’s medical bills can be counted towards the spenddown amount, helping the couple meet Medicaid eligibility.
• Healthcare expenses for dependent children, whether living with or apart from the parent, can often be included in the spenddown calculation.
• Unpaid medical bills (past medical bills), sometimes dating back several years, can be considered on the road to spenddown if they encounter specific standards.
• Healthcare expenses that are not covered by other insurance, such as Medicare or private health insurance, can also be eligible for Medicaid to be applied towards the spenddown amount.

Who can get Medicaid Spenddown?

Not everyone can get Medicaid spend down. People must be positioned in the category of following groups:

• Child under 21 years of age
• Adult over 65 years
• Disabled or Blind

How to calculate the Spenddown amount?

[Individual Income – Medicaid Eligibility Limit] = Medicaid Spenddown amount

The Medicaid spend-down amount is calculated by taking the difference between an individual’s income and the Medicaid eligibility limit set by their state over a precise time frame, which can range from one to six months. This process involves a few steps:

• First, individuals need to identify their monthly income and compare it to the Medicaid eligibility limit for your state.
• The difference between income and this Medicaid limit is the amount an individual needs to spend down.
• The spend-down period can fluctuate from one to six months, reliant on state regulations and guidelines.
• Throughout this period, people can reduce their countable income by the specified amount to become eligible for Medicaid.

Say a fellow’s monthly income adds up to $2,500. The Medicaid limit in his state is $2,000 per month. So to figure his spenddown amount, you take that $2,500 income and subtract the $2,000 limit. In this case, that leaves $500 as his spenddown amount for the month. The government will make him pay that $500 out of his own pocket for medical expenses before they’ll start picking up the tab.

What is Extra Help and how does it impact a person who qualifies for Medicaid through Spenddown?

An individual who’s eligible for Medicaid due to high medical expenses (higher than their income or might be spent down) can get help with the cost of Medicare drug coverage. So “extra help” is a program that lowers out of pocket Medicare drug costs. Individuals having Medicare and Medicaid can qualify for Extra Help and they have to pay a small copayment for Medicare-covered drugs.

Once an individual qualifies for Medicaid through spenddown, they are meant for Extra Help. This program is designed to meet individuals healthcare needs for at least the rest of all months in the calendar (1 year).

Individuals who are eligible for Medicaid through Spenddown in the last 6 months, are automatically eligible for Extra help (rest of the current year).

The Bottom Line

It’s possible for people to qualify for Medicaid long term care by spending down their income and assets. All people should be able to understand the guidelines and rules of their state. Planning spenddown in advance is a great practice to wisely use income or assets by avoiding penalties.