What is the Medicaid Surplus program?

The “Medicaid Surplus” program allows some New York Medicaid applicants who are over Medicaid’s income limit to still become income-eligible, and hence, qualify for Medicaid. This includes persons under 21 years old, aged 65+, blind and disabled, pregnant, and parents with a child under 21 years old. This program is not relevant to assets. If a NY Medicaid applicant has assets over the asset limit, it won’t help in lowering an applicant’s countable assets. Learn about “spending down” assets to become asset-eligible.

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 their 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 $1,732 / month and your mom has $2,200 / month in income. This means she has $468 / month in “excess” income ($2,200 – $1,732 = $468), or put another way, she has a “spend down” of $468 / month. A simple way to think of this is that your mom has a deductible of $468 / month, and once she has paid it, she is income-eligible for Medicaid for the remainder of the month. See Medicaid income limits in New York.

Medical expenses that can be applied to the “spend down” include both paid and unpaid (even those that are a few years old) bills. Examples include 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 their spouse’s medical bills towards their “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. This allows a NY Medicaid beneficiary to pay their excess monthly income to the Medicaid agency in the month in which they require medical care.

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. It is also known as the Medically Needy Pathway to Medicaid eligibility. Not all states allow this pathway to eligibility. See state-specific information.

Specific to the question above, Florida does have a Spend Down Program, also called a Share of Cost Program, for Regular Medicaid. Note that one cannot transfer their Medicaid benefits from one state to another. Learn more.