Some states have established a Medicaid program for medically needy individuals with a household income that is too high to qualify them for standard Medicaid coverage.
Through this program, these individuals have the ability to achieve Medicaid eligibility based on their qualifying medical expenditures.
More than 2.8 million Americans enrolled in the Medically Needy program in 2009, accounting for 5 percent of all enrollments in Medicaid and 11 percent of all spending from Medicaid, or $36.7 billion.
Some of the most common beneficiaries of medically needy programs are the elderly, disabled and people residing in nursing facilities. People with disabilities and the elderly make up over 40 percent of those enrolled in medically needy programs and account for almost 88 percent of Medically Needy program expenses.
To compare, non-disabled adults and children make up nearly 60 percent of Medically Needy program enrollees yet account for only 12 percent of program spending.
Who qualifies for the Medically Needy program?
If you meet certain Medicaid eligibility requirements, like being 65 years of age or older, pregnant or disabled, yet fail to meet the income requirements, you may qualify for the Medically Needy program that helps you achieve Medicaid eligibility. If your medical expenses bring down your income to at or below the income limits for Medicaid eligibility, you may also be able to receive Medicaid benefits. Twenty-eight percent of people enrolled in a state’s medically needy program are also dually eligible for Medicaid.
Depending on the state, the Medically Needy program may be available to some or all categories of people otherwise eligible for Medicaid. A state may, for example, offer medically needy benefits to disabled residents but not elderly residents. If a state offers a medically needy program, however, it must be available to most pregnant women and children in the state.
How do Medically Needy programs work?
If you are considered medically needy, you may still qualify for health benefits by “spending down” the income that exceeds your state’s income standards for medically individuals. The way you spend down excess income is by taking on the costs for medical care and remedial care not covered by other types of health insurance.
Once you have spent enough on those expenses to balance out the overage in your income from your state’s income level for medically needy program services, also known as the spenddown amount, you may qualify for Medicaid. At that point, Medicaid will pay for any costs exceeding those you had to spend down in order to meet eligibility. After each spend down period, you must reapply for Medicaid.
Some states have an optional program that allows you to pay the state your spenddown amount directly rather than providing proof you incurred or paid those expenses. This option is particularly beneficial for those who require Medicaid coverage, yet lack sufficient medical expenses in a given spenddown period to sustain eligibility.
What is a 209(b) state?
In most states in the country, you automatically qualify for Medicaid benefits if you are a recipient of Social Security Income (SSI) benefits. In some states, however, people receiving SSI do not receive Medicaid. These states are known as 209(b) states and there are 11 such states in the country.
If you are over 64 years of age or disabled and you live in a 209(b) state, you can still qualify for Medicaid by spending down your income below the level for Medicaid eligibility on medical expenses. There are medically needy programs in the majority of 209(b) states, although three 209(b) states have no such program, those being: Oklahoma, Ohio and Missouri.
What is the Medically Needy Income Limit (MNIL)?
The amount you must spend down in a month in order to reduce your income to the necessary eligibility standards is known as the Medically Needy Income Limit (MNIL). The MNIL is determined by each state individually. The median MNIL in 2009 was $447 per month, or half the federal poverty level. Resource limits are approximately $2,000 per individual or $3,000 per couple. If you subtract the MNIL for your state for a particular spend down period from your income during that period, the result represents the amount you must spend in medical expenses in order to qualify for Medicaid benefits.
You need not provide proof you paid those expenses either. You simply need to show you incurred those charges. Among the qualifying medical expenses are health insurance plan premiums and Medicare premiums, as well as other qualifying expenses as determined by each individual state.
The MNIL in some states may vary depending on how many people there are in your household and/or by variations in the cost of living in different parts of the state. MNIL can be quite low, often far beneath the federal poverty level, and often as low as a mere few hundred dollars per month.
What if my state does not have a Medically Needy program?
If your state does not have a medically needy program, you may still be eligible for a spenddown amount to achieve Medicaid eligibility. If you are blind, disabled or over 64 years of age, 209(b) states allow you this opportunity regardless of whether or not your state has a medically needy program.
There are, as of this June 2018, 36 states, and the District of Columbia, which have income spenddown programs, either as a 209(b) state or as part of a Medically Needy program. States also offer health care for children whose families may not qualify for Medicare through the Children’s Health Insurance Program. This program must also meet federal requirements, and it may go by different names in different states.
How the Medicaid Expansion Affects the Medically Needy Program
If your state participated in the Medicaid expansion, then it may be even easier now for you to qualify for and receive Medicaid benefits without the need to participate in the Medically Needy program. If you are older than 64 years of age, however, then the Medicaid expansion does not impact you and the medically needy program may still be necessary.