What happens to Medicare beneficiaries who are medically needy or spend-down their surplus income to receive full Medicaid benefits?

Individuals who have met their income spend-down requirements and are eligible for full Medicaid benefits are notified by CMS that they are eligible for the maximum cost-sharing subsides that they qualified for based on their income. They remain eligible for the full subsidies for the remainder of the calendar year without interruption, even if they periodically lose their Medicaid eligibility because they must meet a new spend-down. For example: 

• Mrs. Jones, a Medicare beneficiary, spends down to full Medicaid in March. She will be deemed eligible for the full subsidies through December of that same year. However, if she loses her full Medicaid eligibility and does not go back on Medicaid by the end of the year, she may have to apply for the low-income subsidies for the next year. Alternatively, if Mrs. Jones spends down again the following year, she would once again be deemed eligible for the low-income subsidies. For example, if she meets her spend down in February 2007, she is deemed eligible for the low-income subsidies through December of 2007.

Because individuals who spend down to Medicaid are considered full benefit dual-eligibles, they are assigned to a Medicare drug plan in their region on a random basis. They are able to choose and enroll in a different plan at any time during their subsidy eligibility period just like other full dual-eligibles.

(Back to Medicare Drug Coverage: Extra Help)