A method by which an individual establishes eligibility for a medical care program by reducing gross income through incurring medical expenses until net income (after medical expenses) becomes low enough to make him eligible for the program. The individual, in effect, spends income down to a specified eligibility standard by paying for medical care until his bills become high enough in relation to income to allow him to qualify under the program’s standard of need, at which point the program benefits begin. The spend-down is the same as a sliding scale deductible related to the over-all income level of the individual. For example, if persons are eligible for program benefits if their income is $200 ”month or less, a person with a $300/month income would be covered after spending $100 out-of-pocket on medical care; a person with an income of $850 would not be eligible until he incurred medical expenses of $150. The term spend-down originated in the Medicaid program. An individual whose income makes him ineligible for welfare but is insufficient to pay for medical care, can become Medicaid-eligible as a medically needy individual by spending some income on medical care. Medicaid only covers an individual if aged, blind, disabled, or a member of a family where one parent is absent, incapacitated, or unemployed—that is, fitting one of the categories of individuals who are covered under the welfare cash payment programs.
The deliberate depletion of one’s financial assets in order to meet the criteria for insurance support from Medicaid.