Apple Health for the Medically Needy and Spenddown overview
Revised July 25, 2014
Purpose: To explain the Medically Needy (MN) program and spenddown.
WAC 182-500-0070 defines the Medically Needy program as follows:
"Medically needy (MN) or medically needy program (MNP)" is the state- and federally funded health care program available to specific groups of persons who would be eligible as categorically needy (CN), except their monthly income is above the CN standard. Some long-term care individuals with income and/or resources above the CN standard may also qualify for MN.
The Medically Needy (MN) program provides Apple Health Medicaid health care coverage for aged, blind, or disabled persons, institutionalized individuals, hospice individuals, pregnant women, children, and refugees with income above Categorically Needy (CN) standards and countable resources below the applicable MN resource standard. Those standards are defined in the standards chapter of this manual. There is no MN program related to the Apple Health for Adults (N05) program.
Note: The MN program has the following program codes: F99, G95, G99, K95, K99, L95, L99, P99, S95, and S99.
An individual may qualify for the MN program with or without spenddown. When determining eligibility for the MN program, there may be a difference between CN countable income and MN countable income. This results from the extra income deductions which apply to MN (for more information, see WAC 182-519-0100(5)). Decisions regarding CN eligibility and MN eligibility should be based on the appropriate calculation of countable income.
- When determining countable income for individuals who are aged, blind or disabled, use SSI-related income rules and deeming methodologies.
- When determining countable income for children and pregnant women, use family-related income rules and deeming methodologies.
If an individual's income goes down after the spenddown amount has been calculated, the individual may become eligible for CN coverage. See the Change of Circumstances chapter for more information.
MN without Spenddown
MN without spenddown means that the individual receives MN coverage for 12 months from the month of application without first having to incur any medical costs.
MN with Spenddown
MN with spenddown means that the individual needs to incur medical expenses greater than or equal to the spenddown amount before coverage can begin. The spenddown amount is calculated by subtracting the SSI-related MN income standard from the amount of countable income (after the $20 income disregard), then multiplying this difference by the number of months in the base period.
Base Periods and Retroactive Coverage
The base period is the number of months used to calculate the spenddown amount. The individual may choose either a 3-month or a 6-month base period. If the client incurs qualifying medical expenses before and during the base period, the individual meets the spenddown and receives MN coverage from the date the spenddown was met through the remainder of the base period.
The base period begins the first of the month in which the agency receives an application for medical benefits or may begin the first of the following month if the individual applies late in the month and chooses to withdraw their request for medical coverage in the initial month.
An individual may also request retroactive coverage for any or all of the 3 months prior to the month of application. These month(s) are referred to as a retroactive base period.
Example: We receive an application for benefits on March 10. The individual requests coverage for February only, as he was hospitalized from February 15 - February 21. The individual is eligible for coverage under MN with Spenddown for February. The worker denies MN coverage for December and January and establishes a 1-month retroactive base period for February.
Note: Children and pregnant women who are found eligible for CN coverage in one of the months of a retroactive base period are continuously eligible for CN coverage for one year in the case of children or through the end of the postpartum period in the case of pregnant women.
There is no review for MN coverage. Each request for MN coverage is considered a separate application.
Allowable Medical Expenses
Before medical expenses can be used to reduce or meet spenddown, the individual must have incurred the legal obligation. This means that the individual must have received the medical service or product and have a legal obligation for the cost. The medical expenses used to meet spenddown are the individual's obligation and cannot be billed to Medicaid.
For an expense to be allowed towards spenddown, the expense must have been prescribed by a licensed provider. The following Charts give some guidance on expenses that can be allowed towards a spenddown liability.
Expenses that have been paid using a credit card are considered a paid expense. They are allowed as a paid expense within either the retroactive base period or the current base period in which they paid the bill with the credit card. They are no longer considered an unpaid expense as the provider has been paid and the individual has received the medical item or service. Current credit card payments on a bill that was paid prior to any period of eligibility are no longer considered a valid medical expense.
Medical expenses that are still owed and have not been written off or discharged by the collection agency are allowed as a medical expense and can be considered an unpaid bill for spenddown. The agency will confirm if the debt is still valid and will not allow any interest or fees charged by the collection agency to be counted toward the spenddown. They agency allows only the amount of the original unpaid debt (the medical expense), using the original date of service for the expense when coding it into ACES.
Premiums for private medical insurance are treated as income deductions and are not applied to Spenddown. The agency allows private insurance premiums (not Medicare premiums) as an income deduction and reduces income prior to comparing income to the MNIL standard. In many cases, an individual may become eligible for MN coverage without spenddown using this methodology.
When the individual meets spenddown, the agency determines if it is cost-effective to pay the premiums to ensure the coverage continues. If it is cost effective and the individual meets spenddown, the agency pays the premium. If the individual does not meet spenddown, the agency does not pay the premiums.
For more information on the Premium Payment programs through the Medicaid Purchasing Administration, see Health Insurance Premium Program.
Example: The individual’s spenddown is $600 and the insurance premium is $100 a month. Since the base period is 6-months, the individual meets spenddown and becomes eligible for Medicaid. The agency determines if it is cost effective to pay the insurance premium. If it is, then the agency begins paying the insurance premiums.
Note: In the above example, if the agency didn’t use the insurance premium since the agency had been paying it in the previous base period, then the individual will not meet spenddown. If the individual does not meet spenddown, the agency does not pay the insurance premium. Then, the worker allows the monthly premiums for the base period which makes the individual eligible for coverage. Once eligible, the agency begins paying the premiums.
For clarifying information on specific spenddown topics, click the link below:
Base Periods and Retroactive Coverage
- Review the application to determine if the individual has applied for retroactive coverage. If not, contact the individual to determine if they have any unpaid or paid medical expenses that they incurred during that time period.
- Explain to the individual that they have the option to use the expenses they incurred and paid during the 3-month period or any expenses they have incurred but which remain unpaid towards meeting spenddown in the retroactive base period, or that they may apply the expenses towards their spenddown liability in the current base period.
- Explain the advantages or disadvantages of both options. If the individual chooses to use expenses that were incurred and paid within the 3-month retroactive period towards the current base period, we cannot then use the expenses towards establishing coverage in the retroactive period at a later date.
- ACES defaults to a 6-month certification period; however that may not be the best option for the individual. If possible, talk to the individual to determine their circumstances. Upcoming hospitalizations or other major expenses may make a difference in selecting a base period.
- If the spenddown amount is high, a 3-month base period may be to the individual's benefit.
- If the spenddown amount is low and the individual can easily meet it, a 6-month base period would provide medical coverage for a longer period of time.
Example: An individual has $30.00 per month in excess income.
Spenddown in this example would be $90.00 for a 3-month base period and $180.00 for a 6 month base period.
If the individual has $250.00 in qualifying medical expenses, a 6-month base period would be beneficial to the individual since they would have a longer period of eligibility.
If the same individual has no qualifying medical expenses at the time of application and anticipates no large medical needs, a 3-month base period may be in the individual's best interests. It would enhance the individual's opportunity to meet spenddown and obtain coverage.
Medical Providers and Spenddown Information
- When spenddown is met and benefits authorized, notify the medical service providers affected by spenddown. Those whose bills remain the responsibility of the individual may continue to pursue collection for those bills.
- Those provider bills which will be covered by the ProviderOne Card need to be billed to the Medicaid program, and the provider must cease billing the individual for those covered services.
- The agency is authorized to release spenddown information to providers without a signed release of information form if it is information necessary for the provider to correctly bill HCA. This information includes:
- the amount of the spenddown assigned to their bill (if the bill is a split bill)
- the specific expenses and dollar amounts of their bill(s) that were used
- the total dollar amount of the spenddown liability
- the balance of spenddown remaining to be met.
- If providers have questions related to spenddown, do not refer providers to the Medical Assistance Customer Service Center provider line (1-800-562-3022) as they are unable to provide this information. Instead, refer providers to:
- HCA MEDS (1-800-562-3022) for individuals on MN with spenddown who are pregnant or children; and
- DSHS Specialty Unit (1-877-501-2233) for other individuals on MN with spenddown.