Medical Assistance for People Who Are Age 65 or Older and People Who Are Blind or Have a Disability Health Care Expenses

To be eligible for Medical Assistance (MA) with a spenddown, people may reduce excess net income by deducting allowable health care expenses that are not subject to payment by a third party.

The person, or one of the following family members, can incur the health care expenses:

  • Spouse if the spouse’s income is used to determine the person’s eligibility

  • Legal dependents if they are included in the person’s family size or would have been included when the bills were incurred

  • Siblings, half-siblings, and step-siblings who are included in the person’s family size

  • Parents or stepparents who live with the person if their income is actually used to determine the person’s eligibility or they are included in the person’s family size

The family members do not have to be applying or eligible for MA to use their health care expenses to meet the spenddown of the family member applying for MA with a spenddown.

Allowable Health Care Expenses to Meet a Medical Spenddown

Allowable health care expenses include:

  • Paid or unpaid bills incurred in the current spenddown period

  • Unpaid bills incurred before the current spenddown period

Payments from a health savings account (HSA) funded by the person are not considered third party payments.

Health care expenses incurred before the spenddown satisfaction date are not eligible for MA payment.

Types of Health Care Expenses

Allowable health care expenses are deducted from the spenddown in the following order:

  1. Health insurance expenses not paid for or reimbursed by MA and incurred during the current six-month period. This includes:

    • Health, dental, vision and long-term care (LTC) insurance premiums

    • Indemnity policy premiums that reimburse health care expenses

    • Medicare premiums

    • Medical Assistance for Employed Persons with Disabilities (MA-EPD) obligations

    • Co-pays

    • Deductibles, including MA family deductibles

  2. Unpaid health care expenses that the person is still obligated to pay and that were incurred before the six-month period.

    • The health care expense may be:

      • An expense charged directly to the person by a medical provider

      • An expense that a medical provider has transferred for collection to a person or agency actively pursuing the collection

      • A loan payment owed to a person, financial institution, or credit company for which the loan proceeds are paid to a medical provider. Interest and service charges applied to a loan are not a health care expense.

    • The health care expense cannot have been:

      • Used to calculate a spenddown during a prior certification period, whether or not the calculation resulted in the spenddown being met. Except the expense may be used to meet another spenddown if eligibility for the entire certification period was denied.

      • An MA-covered service incurred in a prior certification period of MA

  3. Non-reimbursable health care expenses that are not covered by MA, incurred during the current six-month period, including:

    • MA co-payments

    • Non-reimbursed Health Care Access Services

    • Health care expenses for dependents or financially responsible relatives who are not eligible for MA

    • A remedial care expense for people living in a residential living arrangement and there is a Housing Support (HS) agreement with the county agency

    • Alternative Care (AC) costs to the enrollee

    • Expenses paid by the Insurance Extension Program that pays health insurance premiums for individuals who are HIV positive.

    • Expenses for long-term care services paid by the enrollee during full months of MA-LTC ineligibility due to a transfer penalty or when the person fails to name DHS the preferred remainder beneficiary on an annuity.

    Unused portions of allowable health care expenses incurred during the current six-month period can be carried over and applied to future months.

    To qualify as an allowable spenddown expense for MA, the non-reimbursable health care service must meet all the following conditions:

    • Prescribed or recommended in writing by the person's physician or dentist.

    • Directly benefits the person or a member of the person's immediate family.

    • Available through a licensed medical provider but not necessarily obtained through a licensed medical provider.

    • Not be reimbursable through the county health care access plan.

    • Medically necessary.

    A medically necessary service is a health service rendered for any of these situations:

    • In response to a life-threatening condition or pain.

    • To treat an injury, illness, or infection.

    • To achieve a level of physical or mental function consistent with prevailing community standards for the diagnosis or condition.

    • To care for a mother and child through the maternity period.

    • To provide preventive health service.

    • To treat a condition that could result in physical or mental disability.

    People are not required to provide proof of medical necessity for a medical expense provided by a medical provider, such as pharmacist or medical facility. These services are considered medically necessary.

    For medical expenses not provided by a medical provider, medical necessity must be established through the completion of the Medical Need form, DHS-6112, or a written statement from a medical provider. Once medical necessity is established for an expense via the Medical Need form or other written statement, the enrollee does not need to submit a new Medical Need form for the same expense in the subsequent six-month periods.

  4. MA-covered services received during the current six-month period that will be paid by MA, including:

    • Waiver services received through a home and community based services waiver

    • Personal care attendant (PCA) services

    • Targeted case management services

Reporting Health Care Expenses

People must report and verify all health care expenses used to meet a medical spenddown, except for the remedial care expense.

MA can be approved with a monthly spenddown for people who apply, and have not yet received services sufficient to meet their spenddown, but who document that they will be receiving services sufficient to meet their spenddown.

Health Care Expenses Not Allowed to Meet a Spenddown

The following are not allowed to meet a spenddown:

  • Room and, when applicable, board charges in a residential living arrangement, including fuel, food, utilities, household supplies and other costs necessary to provide room and board.

  • The additional charge for a private room in a skilled nursing facility (SNF), when not medically necessary, is not covered by MA and is also not an allowable spenddown expense. When the private room is medically necessary, the charge is covered by MA.

  • Cost of care programming charges at a treatment center or institution.

  • Health insurance expenses for future months have not been incurred. Projected health insurance expenses that have not been incurred cannot be deducted when determining a six-month medical spenddown.

Legal Citations

Code of Federal Regulations, title 42, section 435.831

Code of Federal Regulations, title 42, section 483.10

Minnesota Statutes, section 256B.056, subdivision 5

Minn. Stat. 256B.0575