What is a Medicaid spend-down plan?

A Medicaid spend-down plan is a way for individuals in Hawaii to become eligible for Medicaid coverage if their income is higher than the maximum allowed by the program. The plan works by having the individual pay for medical expenses until their income falls below the state-mandated limit. The amount of money an individual has to spend down is called the spend-down amount, and it is calculated as the difference between the individual’s income and the maximum allowed by Medicaid. For example, if the maximum allowed income for an individual is $25,000, and an individual has an income of $26,000, then the spend-down amount would be $1,000. The individual can choose to pay for medical expenses such as doctor visits, hospitalizations, and prescription drugs until the spend-down amount has been reached. When the spend-down amount has been paid, the individual is eligible for Medicaid coverage. However, any medical bills that are paid must be for the individual’s own medical care and not for someone else’s. Medicaid spend-down plans can be beneficial for those individuals in Hawaii whose income is just above the maximum for Medicaid eligibility as it allows them to still get the necessary medical care they need.

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