Income Spend Down (Medicaid “Spendown”)
An applicant must have a limited monthly income to be eligible for Medicaid. If one has income above the qualifying limit, one can still qualify for Medicaid via spend down. In many states, this option is called the “Medically Needy Pathway”. Depending on the state in which one resides, “medically needy” may be called any of the following: Share of Cost, Excess Income, Surplus Income, or simply, Spend Down.
Regardless of the name, these programs allow applicants to spend “excess” income on medical bills and expenses, such as past-due medical charges, prescription medications, health insurance premiums, and doctors’ appointments. Once Medicaid applicants have spent their income down to the medically needy income limit (MNIL) on medical expenses, they will be Medicaid eligible for the remainder of the “spend down” period, which is between 1 and 6 months.
Information obtained from https://www.medicaidplanningassistance.org/