Medicaid Spend-Down

Because Medicaid is a health insurance program for the poor, one must have income and assets below a certain limit to be eligible.  For a single elderly or disabled person in New York State in 2017, these limits are $825/mo. of income and $14,850 in total assets.  (The income limits for people Disabled, Age 65+, or Blind ("DAB"), people age 18-21 and their parents, grandparents or other "caretaker relatives" living with them are in BOX 3 on the HRA Medicaid Chart ). Because of the high cost of living, especially medical expenses, many people find that although they are barely scraping by, they are "too rich" to get Medicaid.  Fortunately, there is sometimes a way of getting Medicaid even if your income and/or assets are over the limit: spend-down.

The spend-down program (also called excess or surplus income) is a way for certain categories of applicants to get Medicaid even though their income or assets are over the limit, by offsetting their excess with medical expenses.  For example, imagine two potential Medicaid applicants (who we will assume both are in the DAB category and both have assets below the limit). 

Note that the spend-down program is not available to all New York Medicaid applicants. 

People who are under age 65 and are not disabled generally don't need to use spend down  because they are eligible for "MAGI" Medicaid or the Essential Plan under the Affordable Care Act (ACA or Obamacare), which uses higher income limits and NO ASSET TEST.    See articles here and here and here re Essential Plan.  

Some in the Essential Plan may still want Medicaid in order to get Medicaid long term care or "waiver" services.  They may "spend down" to the regular non-MAGI limits only if they are under age 21 or a caretaker relative of a child under 21, or disabled.    

See this special alert re Managed Long Term Care and Spend-Down.

NYLAG has published some training materials on how Medicaid budgeting works and the spend-down program, which you can download below:

These sources more clearly explain:



  1. Working people age 18 - 65 with disabilities may be eligible for Medicaid even with higher incomes, with no spend-down, if they are working even a minimal amount - even for a friend or neighbor.. See information about the Medicaid Buy-In For People with Disabilities

  2. Married couples - if one spouse is receiving Managed Long Term Care or "Immediate need" personal care services, the other spouse is entitled to "Spousal Impoverishment protections" that greatly increase how much they may have in income and resources.  

  3. An individual over age 18 was in a nursing home or adult home for more than 30 days, for which Medicaid paid some of the cost, who is discharged and enrolls in an MLTC plan, can keep extra money through a Special Income Standard for Housing Expenses

  4. USING SUPPLEMENTAL NEEDS TRUSTS (SNT) TO ELIMINATE THE SPEND-DOWN - People who are "disabled" as defined for Social Security benefits -- whether under or over age 65  --may deposit their spend-down into an SNT, and request their local DSS to rebudget their income to disregard the deposited income - this eliminates the spend-down.  See more here:

NYC HRA Medicaid Program Forms & Materials about Spend Down--

ALERT - Tips for Managed Long Term Care Applicants who have a Medicaid Spend-down (Excess income)

ADVOCACY:  Read the May 2009 Report by the New York Health Foundation on "Streamlining New York's Excess Income Program," prepared by Manatt Health Solutions and the Consumer Workgroup Response.  

This article was authored by the Evelyn Frank Legal Resources Program of New York Legal Assistance Group.


Article ID: 46
Last updated: 22 Oct, 2017
Revision: 18
Medicaid -> Financial Eligibility -> Medicaid Spend-Down