As individuals retire or age into Medicare, their insurance situation can change dramatically. There are a multitude of options open to those with Medicare. The terms are different, the prices are different, the products offered are dramatically different each year.
The purpose of this column is to give those who are eligible for Medicare, or soon to be eligible for Medicare, some understanding of their insurance options and how it could impact their health and finances.
These questions and answers are meant as a guide to help you understand the complex questions you are now thinking about. Each individual's specific situation may create a different solution. You shouldn't necessarily do what your friends, family and neighbors do.
The last couple of articles in this series were about Medicaid and the different types. I have a couple of follow-up questions I received that I would like to address here.
Question: What is a Medicaid Spend-down?
Answer: Very often when individuals/couples apply for Medicaid their income is above the income allowance for Medicaid. For some benefits, this means you are not eligible to receive them, like Slimb-QI-1 or QMB benefits. For some Medicaid benefits if your income is higher than the amount allowed, you can still receive Medicaid, you have what is called a Spend-down. This Spend-down means you must spend the difference between your income and the amount allowed on medical expenses, and then Medicaid will cover the rest of your medical costs for that month. This spend-down is a monthly dollar figure that you are responsible to pay. Some individuals pay that amount in medical bills and then send the receipts on to their Medicaid worker as proof. The remainder of their bills are then paid by Medicaid. Some individuals pay that monthly spend-down amount to Department of Social Services directly. Medicaid then picks up all their medical bills for that month.
Senior Life Matters
Let me give you an example;:If an individual lives in an apartment and has income of $957 per month and less than $14,400 in assets, he/she could apply for Community Medicaid. In this scenario the individual meets the asset test for Community Medicaid, but is over income. He could still apply for Medicaid at DSS. Once processed, the determination would come back that he is $137 over income. He could choose to pay the first $137 in medical bills and then send receipts into his Medicaid worker each month to document his paying the bills. If he doesn't pay that much in bills, he doesn't need to send them in.
This individual might have insurance premiums that he pays each month that could be submitted towards this bill. He could submit co-pays he pays at the doctors, pharmacy, durable medical equipment or other medical care. Once he has submitted $137 worth of medical bills, the remainder of his medical bills will be covered by Community Medicaid for that month.
This individual could also choose to pay $137 to DSS each month. This payment would cover the Medicaid spend-down and therefore make him fully eligible for Medicaid all month. Depending on the amount of the Spend-down and the situation of the individual/couple, one way might be easier than another.
If an individual has met his spend-down for six consecutive months a hospital bill would be covered in full. If he has not met his spend-down and is hospitalized, the co-pay for the hospital stay becomes 6 x the spend-down. In the previous scenario that would be 6 x 137= $822.
I hope this illustrates a Medicaid spend-down and how it can help you meet your medical bills.
Janell Sluga is a geriatric care manager certified and works for Senior Life Matters, a program of Lutheran Senior Housing, and has worked in Chautauqua County with seniors for more than 18 years. She is HIICAP (Health Insurance Information, Counseling & Assistance Program) counselor-trained by Office for the Aging. She does not sell insurance or represent any insurance company. She is an unbiased source of insurance and education to help seniors choose the best option for them.