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Medicaid Spend-Down Option
a Health Insurance Lifesaver

By Girard A. Plante

The economic downturn over the past four years has decimated the finances of millions of Americans. Foreclosures are at all-time highs, pensions have been wiped out, and health insurance benefits have been cut off.

For people suddenly stricken by illness, disease or serious injury, the specter of exorbitant medical costs is all-consuming. Despite that nightmare scenario, there is a program that can pay for bank-busting medical bills: Medicaid.

A provision called a “spend down” can be a viable option for people eligible for the publicly funded health insurance program. “It allows people to receive medical care without going bankrupt,” said Elaine Saly, a health policy analyst with Families USA, a Washington, D.C.-based advocacy organization that works with states on Medicare and Medicaid.

For people who qualify, the spend-down provision could be a lifesaver. “It functions like a deductible in two ways," Saly said. "You can use a medical bill that equals the amount a state sets for the spend down -- or you pay out of pocket.”

States can set different levels for the amount one pays toward a spend-down amount before Medicaid pays medical expenses, Saly said. “It's a temporary program to address very high medical costs and allows people with pre-existing conditions to get coverage.”

In certain states, there are various Medicaid options for Social Security recipients. In Massachusetts, recipients can collect up to a threshold of $1,232 monthly before their MassHealth coverage is affected. Any amount over the threshold renders recipients ineligible for Medicaid. But Massachusetts' spend-down provision allows recipients to retain their MassHealth benefits.

Another alternative to paying a costly spend down in Massachusetts is CommonHealth, which covers persons with disabilities. If they work 10 hours a week, they pay a minimal monthly premium that doesn't cause financial hardship.

This past October, the Social Security Administration announced a 3.4 percent increase in Social Security payments for its 70 million recipients. The small hike will be a welcome boost to some, but others caught in the situation of having too much income face the specter of losing critical funds.

People with physical disabilities who require personal care attendant services to live independently may have few alternatives. But that is not the case in Massachusetts, said Merit Young, a benefits counselor with the state's rehabilitation commission.

“A person living with a disability, especially individuals who rely on PCAs, can meet special conditions. In the 12 years I've been working with people who require PCA services, I never saw one person lose (his) MassHealth benefits.”

Knowing one's rights and being a savvy self-advocate can keep consumers from losing out on the array of services available in times of crisis. The first step to avoiding a spend down is not to panic; the next is to go to a legal aid agency or a nearby center for independent living, both of which can instruct people about their rights and help in securing benefits.

Moreover, with baby boomers retiring by the thousands daily, long-term-care insurance is a huge issue. Though there are myriad policies to choose from, most are expensive and may not cover care if consumers outlast the life of the policy.

So, is Medicaid the best option? The Kaiser Family Foundation published data in collaboration with a January 23 rd Washington Post article, which state that Medicaid "is the largest source of coverage for long-term care. But Medicaid comes with significant limitations. The program is restricted to people with extremely limited income and virtually no resources, which forces middle-income consumers to spend down their assets if they want to qualify.”

Still, Saly believes that Medicaid's spend down is a realistic choice when there are no other options to getting health insurance. “We improve the (Medicaid) programs,” she said.

For more information on Medicaid's spend-down provision, go to www.familiesusa.com .

Girard A. Plante is a journalist and disability rights advocate who has written on disability rights issues for 23 years. He lives in Newton, Mass.


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