What Is a Medicaid Spend Down?

The Chamberlain Law Firm

When faced with the necessity of long term care, many Americans find themselves in a dire financial situation. This is because long term care costs in this country are extremely high.

Adult day health care services are on the low end, with median monthly costs at $1,950 in New Jersey and $1,907 in New York. Unfortunately, for day services, that is not a small number and can take a serious toll on anyone’s finances, needless to say an older person who may be on a limited budget.

Nursing home costs, on the other hand, are much higher. In New York, the median monthly cost for a semiprivate or private room is $12,775 and $13,233, respectively. In New Jersey, the median monthly costs are $11,254 and $12,151 for a semiprivate room and private room, respectively. Such costs have the potential to diminish a life savings in years—if not months.

When dealing with these exorbitant costs, rather than solely facing the option of spending all of your life savings, one should consider what is generally referred to as a Medicaid spend-down.

Medicaid Spend-Down

A Medicaid spend-down is a strategy that enables individuals with income or assets above Medicaid’s eligibility limits to qualify for the program by reducing their excess resources. This process is particularly beneficial for seniors and disabled individuals who face high medical expenses that they cannot afford. In this guide, we will discuss the Medicaid spend-down process in New York and New Jersey and how an elder law attorney can help you navigate the complexities of the system.

The Medicaid spend-down comes into play when an individual’s income or assets exceed the eligibility limits for Medicaid, but they still require assistance with their medical expenses due to high costs or long-term care needs. This situation is particularly common among seniors and disabled individuals who may have extensive healthcare costs that are difficult to manage without financial support from Medicaid.

When an individual finds themselves in this situation, they may choose to engage in the Medicaid spend-down process to become eligible for the program. The spend-down process typically involves reducing one’s income or assets by incurring medical expenses equal to or greater than the excess amount over the eligibility limit. By doing so, the individual can meet the eligibility threshold for Medicaid and access the healthcare benefits they need.

How Does the Medicaid Spend-Down Work in New York & New Jersey?

Each state has its own set of rules and guidelines for implementing Medicaid spend-down procedures. In both New York and New Jersey, the spend-down process allows individuals to deduct their medical expenses from their income to meet the eligibility threshold. This is done through the “medically needy” or “spend-down” program, enabling individuals to qualify for Medicaid by incurring medical expenses equal to or greater than their excess income or assets.

Let’s consider an example to illustrate the Medicaid spend-down process. Imagine Mary, a 70-year-old widow living in New York, who has a monthly income of $2,000 from Social Security and a modest savings account. The income limit for Medicaid eligibility in New York for elderly individuals is $934 per month. This means Mary’s income is $1,064 over the eligibility limit.

To engage in the spend-down process, Mary needs to incur medical expenses equal to or greater than the $1,064 excess income she has each month. Mary has ongoing prescription costs, monthly doctor visits, and requires physical therapy for her arthritis. She consults with her elder law attorney, who helps her track and document her medical expenses. By incurring and providing proof of $1,064 worth of qualified medical expenses each month, Mary effectively “spends down” her excess income to meet the Medicaid eligibility limit. Once she has completed this process, she can apply for Medicaid coverage and receive assistance with her healthcare needs, including support for her long-term care expenses.

Navigating the Spend-Down Process with an Elder Law Attorney

Given the intricacies of the Medicaid spend-down process in New York and New Jersey, it is crucial to consult with an experienced elder law attorney who understands the specific requirements and procedures in each state. An elder law attorney can help you:

  1. Determine your eligibility for the spend-down program based on your income and assets.
  2. Identify which medical expenses qualify for the spend-down process.
  3. Develop a strategic plan to reduce your excess resources and meet the eligibility threshold.
  4. Assist with the application process for Medicaid, ensuring that all necessary documentation is provided.
  5. Provide guidance on asset protection strategies to preserve your wealth while meeting Medicaid eligibility requirements.


The Medicaid spend-down process can be a valuable tool for seniors and disabled individuals in New York and New Jersey who need assistance with their medical expenses but have income or assets exceeding the eligibility limits. By working with a skilled elder law attorney, you can navigate the complexities of the system, protect your assets, and ensure that you or your loved one can receive the much-needed Medicaid benefits. Contact our knowledgeable New Jersey and New York elder law attorneys at The Chamberlain Law Firm today by calling us at (201) 273-9763 to discuss your specific situation and explore your options.

This article is for informational purposes only. It is not intended as legal advice. In the event you would like to speak with a lawyer about the specifics of your case, contact The Chamberlain Law Firm at (201) 273-9763 to schedule a consultation.

Our Reviews See What Our Clients Are Saying

Mr. Chamberlain went above and beyond helping me figure out the next steps in planning for my elderly father’s future. One can imagine how overwhelming and confusing this...

Cheryl Berkowitz

So appreciative of the amazing services Andrew Chamberlain provided me. I needed help with a will. Andrew was very knowledgeable and answered all of my questions. He and...

Erika S

We worked with Andrew on our wills, power of attorney, and health directives. He was very responsive and the quality of what we received was excellent. It was definitely...

Evelyn Noether

Where to Find Us

381 Broadway, 2nd Floor

Westwood, NJ 07675

Pearl River
1 Blue Hill Plaza #1509

Pearl River, NY 10965

Contact Us