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Medicaid Spenddown - Medically Needy - Iowa

A spenddown is established when countable income is over the Medically Needy Income Level (MNIL). Click on Desk Aid and see the MNIL amounts under the Medically Needy Medicaid category.

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When a spenddown is established, the client must have incurred medical expenses that meet or are over the spenddown amount before a Medicaid card will be issued. Medical expenses used to meet spenddown are not paid by Medicaid and remain the client’s responsibility to pay.

When a spenddown greater than zero is established, the spenddown is for a two month certification period with some exceptions like the retroactive certification period. Persons with a spenddown greater than zero are required to file for recertification at two month intervals to continue eligibility.

NOTE: An increase in income could result in a spenddown being established on a case that previously did not have a spenddown to meet – or an increase in the amount of spenddown on a case that already had a spenddown.

ALSO NOTE: An increase in earned income above substantial gainful activity (SGA) amount would affect a person’s status of disabled if the person had been determined disabled under a department determination of disability. The person would no longer qualify for Medically Needy coverage as disabled.

Persons may qualify under either:

SSI-related Medically Needy

·                        Aged, blind or disabled

Income for spenddown for SSI-related MN: Unearned income is counted dollar for dollar (100%) after a $20 exclusion; earned income is counted one dollar for each two dollars of earnings (50%) after a $65 exclusion. Entitled to receive deductions for Impairment Related Work Expenses (IRWE), for funds included in an approved Plan for Achieving Self-Support (PASS), and for Blind Work Expenses (BWE).

FMAP-related Medically Needy or CMAP-related Medically Needy

·                        Children under age 21

·                        Parents or other specified relatives of deprived children, or

·                        Pregnant women.

Income for spenddown for FMAP-related MN or CMAP-related MN: unearned income is counted dollar for dollar; earned income is counted dollar for dollar after a 20% deduction plus childcare. Medicaid allows childcare deductions up to $175 per month for a child age 2 and over and up to $200 per month for children under age 2.

See Also:

·           Overview of Medical Assistance in Iowa

·           Welcome and Introduction to Benefits in Iowa

Source: Iowa Dept of Human Services Employees Manual

Title 8 Medicaid

·                        Chapter J, Medically Needy

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