The option to have a "medically needy" program allows states to extend Medicaid eligibility to additional qualified persons who may have too much income to qualify under the mandatory or optional categorically needy groups. This option allows them to "spend down" to Medicaid eligibility by incurring medical and/or remedial care expenses to offset their excess income, thereby reducing it to a level below the maximum allowed by that State's Medicaid plan. States may also allow families to establish eligibility as medically needy by paying monthly premiums to the State in an amount equal to the difference between family income (reduced by unpaid expenses, if any, incurred for medical care in previous months) and the income eligibility standard.

Eligibility for the medically needy program does not have to be as extensive as the categorically needy program. However, States which elect to include the medically needy under their plans are required to include certain children under age 18 and pregnant women who, except for income and resources, would be eligible as categorically needy. They may choose to provide coverage to other medically needy persons: aged, blind, and/or disabled persons; certain relatives of children deprived of parental support and care; and certain other financially eligible children up to age 21. In 1995, there were 40 medically needy programs which provided at least some services to recipients.

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Page Last Modified: 12/14/2005 12:00:00 AM
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