What is a Medicaid Spend Down?

Perhaps the most common challenge facing New Yorkers looking to qualify for Medicaid for home care is having income above the Medicaid limit. This “surplus” or “excess” income is commonly referred to as “spend-down”. By default, Medicaid requires consumers to “spend-down” their income that is above the limit towards the cost of health care before accessing Medicaid benefits – much like a deductible. This often proves extremely difficult, if not impossible.

The practical Medicaid income limits for most consumers seeking home care are $845/month for an individual ($825 plus a $20 disregard) and $1,229/month for a couple ($1,209 plus a $20 disregard). Between housing costs and paying for the basics, even consumers with income well above the Medicaid limits often find themselves with little extra money at the end of the month. As a result, many people in need of home care find themselves between a rock and a hard place. They can’t afford to “spend-down” and they certainly can’t afford to pay for care out-of-pocket. Enter the pooled income trust.

What is a Pooled Trust?

In New York State, income deposited by disabled individuals into a pooled income trust is disregarded for the purpose of determining their Medicaid budget. As such, disabled consumers seeking Medicaid coverage for home care can deposit their “surplus” or “excess” income into a pooled income trust and qualify for Medicaid without having to “spend-down”. The money they deposit into the pooled income trust remains available to them to pay their bills.

Who can use a pooled income trust to qualify for Medicaid?

In New York State, people who have been found disabled by either the Social Security Administration or New York State may use a pooled income trust to qualify for Community Medicaid with Long-Term Care (the Medicaid level that covers home care). Most people who use pooled income trusts to qualify for Medicaid were not previously found disabled by the Social Security Administration and must provide disability documentation, together with documentation of the pooled trust itself, when submitting their pooled trust to Medicaid for approval.