Updated** Understanding A Medicaid Deductible, or "Spenddown"

En Espanol - Actualizado ** Entendiendo el Deducible de Medicaid, o "Spenddown"

Most Medicaid programs cover all essential health benefits, like doctor and hospital visits, dental care and vision services. However, some programs only cover limited benefits. For example, Emergency Services Medicaid and the MOMS program (information here) provide partial services to immigrants. Another "partial" program is called the Medicaid Deductible program (previously called Medicaid Spenddown).

The Medicaid Deductible program is available to people with disabilities, the elderly, children and parents of children who are over the income limit for full Medicaid. In order to qualify for a deductible, you also would have to meet an asset test (which takes into account your assets, excluding a house and car). An individual who is over the income limit for full Medicaid and has very few assets may be approved for the Deductible program. Department of Health and Human Services (DHHS) will specify the amount of the deductible, a number ranging from less than one hundred dollars to several thousands of dollars. This number is based on your household income.

The Idea Is Simple, But The Action Is Complicated

With a monthly Medicaid deductible, for Medicaid to become fully active, bills amounting to the deductible must be reached in a given month. The individual is then responsible for the deductible and DHHS pays the remainder. For example, let's say Martha's deductible was set at $800, and Martha has a hospital bill in May for $5,000. Martha is responsible for paying the $800 to the hospital and DHHS pays $4,200. In order to get DHHS to pay, a deductible report has to be submitted.

If the bill was incurred on May 1, and a deductible report was submitted, then for the rest of the month Martha has full Medicaid, and Medicaid would pay for any necessary medical service, such as  glasses, a dental cleaning, or prescriptions. Starting on June 1, Martha does not have Medicaid, but again would have to meet a deductible.

If Martha went into the hospital on May 31, and didn't have medical expenses before then, she wouldn't meet the deductible until May 31. Starting on June 1, the deductible/spenddown resets, so she probably wouldn't be able to get her teeth cleaned in May! Some people, particularly people living in nursing homes, do meet their deductible each month, but most people do not.

Remember: In order for Medicaid to become active, the bills and a Deductible Report must be sent to the DHHS caseworker. The deductible must be reached again each month for Medicaid to become active.


Medicaid Deductibles can help, but they don't count as FULL health coverage

Important: The Medicaid Deductible program does not meet the mandates of the Affordable Care Act. That means that if this is the only coverage you have, you may be assessed a tax penalty when filing taxes at the end of the year.

The good news is that you can have a Marketplace plan or employer insurance coverage along with a Medicaid deductible. (Remember, Medicaid can be a secondary insurance!) 

Did you get the right coverage?

Sometimes an individual is approved for the Deductible program but really should have full Medicaid. If you think you should have full coverage, the Washtenaw Health Plan offers a free assessment. For help submitting bills for your Medicaid deductible or if you think you should have full Medicaid, stop into the Washtenaw Health Plan. Walk-in hours are Monday through Friday from 9am to 4pm. We are located at 555 Towner, Ypsilanti, MI. 

Questions? Call (734) 544-3030.

--Haley Haddad and Ruth Kraut

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