What is the Medicaid Surplus program?

Last updated: June 08, 2020
Medicaid Long Term Care | Questions and AnswersCategory: EligibilityWhat is the Medicaid Surplus program?
medicaidplanner Staff asked 4 years ago

My mom lives in New York and I have heard about the Medicaid Surplus program. I am confused as to what it is and how it relates to income or asset spend-down. And is it available in other states? My mom moves back and forth from New York to Florida every year.

1 Answers
medicaidplanner Staff answered 4 years ago

The “Medicaid Surplus” program allows New York Medicaid applicants (seniors aged 65 and over, blind and disabled residents, persons aged 21 and under, pregnant women, and parents with a child under 21 years of age) who are over Medicaid’s income limit, to still qualify for Medicaid. To be clear, this program is not relevant to assets, which means if a NY Medicaid applicant has assets over the asset limit, it won’t help in lowering an applicant’s countable assets. (For information on how to spend down excess assets, click here).

The way this program works is that a Medicaid beneficiary’s “excess” income, the amount of income that is over NY Medicaid’s income limit, goes toward the cost of his / her medical expenses. Essentially, the individual’s “excess” income must be “spent down” in order to meet Medicaid’s income limit. As an example, let’s say the income limit is $875 / month and your mom has $1,300 / month in income. This means she has $425 / month in “excess” income ($1,300 – $875 = $425), or put another way, she has a “spend down” of $425 / month. A simple way to think of this is that your mom has a deductible of $425 / month, and once she has paid it, she is eligible for Medicaid for the remainder of the month. To see the current Medicaid income limits in New York, click here. Please note that income limits change on an annual basis.

Medical expenses that can be applied to the “spend down” include both paid and unpaid (even those that are a few years old) bills, although specific rules do exist. Examples of bills that might be applied towards one’s “spend down” include a hospitalization, prescription medications, physician / dental / vision appointments, eyeglasses, hearing aids, Medicare and Medicaid co-payments / deductibles, chiropractor services, and long-term care costs, such as in-home personal care assistance, home health aides, adult day care, etc. A married Medicaid beneficiary can apply his / her spouse’s medical bills towards his / her “spend down” amount.

For those who do not have medical expenses from which to “spend down” their excess income, there is another option, the Pay-In program. With this option, a NY Medicaid beneficiary pays his / her excess monthly income to the Medicaid agency in the month in which he / she requires medical care.

Please note; the “Medicaid Surplus” program is called by a variety of names, including the Medicaid Surplus Income Program, the Medicaid Excess Income Program, and the Medicaid Spend Down Program. One might also hear it referred to as the medically needy pathway to Medicaid eligibility.

While not all states have a “Medicaid Surplus” program, many do. To find out if a specific state has such a program, click here and then click on the state name.

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