The practice is called medical “spend-down” and it affects people with disabilities and the elderly. Organizations such as the Arc of Midland are concerned that some of the people they serve will barely eke out a life for themselves because the spend-down takes away so much of their money. The Lansing-based Michigan Disability Rights Coalition is gathering like-minded groups in hopes of finding a legislative way out of the spend-down.
The spend-down affects people with medical costs that overwhelm their incomes but whose incomes exceed predetermined thresholds. As a result, they are not eligible for Medicaid. They might receive Medicare, which provides primary insurance. But it doesn’t pay for expensive services they might need, such as in-home health care or support services. They might receive disability assistance or have part-time jobs.
To spend down to Medicaid eligibility, the person subtracts health care expenses from his/her income. The spend down is monthly. So if a person has an $800 spend-down he/she will have to pay $800 out of pocket each month before Medicaid kicks in, explained Jan Lampman, executive director of the Arc of Midland.