What is Spend-Down?
Spend-down refers to the process where an older person with multiple health problems and high healthcare costs can reduce their income and assets each month to qualify for Medicare and Medicaid benefits. By ‘spending down’ their resources on medical expenses, the individual can meet the eligibility requirements for these crucial healthcare programs.
How Does Spend-Down Work?
Each month, the individual must use their income and assets to pay for medical bills and other healthcare-related expenses. Once they reach the spend-down limit set by the state, they become eligible for coverage under Medicare and Medicaid. This allows them to access necessary medical services and treatments without facing financial hardship.
Benefits of Spend-Down
Spend-down offers a lifeline to seniors who cannot afford high healthcare costs on their own. By utilizing this strategy, they can access vital healthcare services that would otherwise be out of reach. Additionally, spend-down helps individuals avoid exhausting their savings and assets, ensuring they have the financial resources to cover other essential needs.
Real-Life Example
For instance, a 75-year-old retiree with chronic health conditions may have limited income and substantial medical expenses. By engaging in spend-down, they can allocate a portion of their income each month towards healthcare costs, eventually qualifying for Medicare and Medicaid coverage. This enables them to receive necessary treatments and medications without depleting their savings.
