7532.1 Limitations on Allowable Medical Expenses

To be allowed toward the spenddown, expenses must be incurred in the current eligibility base or, if incurred outside of the current eligibility base and the individual was legally obligated to pay the expense on the first day of the base and such expense has not been previously applied to spenddown in any other base period in which the spenddown was ultimately satisfied. This includes instances when the individual has taken out a loan to pay the expense or charged the balance on a credit card. Medical bills transferred to a collection agency for repayment are considered the responsibility of the individual.

All expenses which are incurred by persons in the assistance plan as well as those incurred by legally responsible family group members are allowable within the limitations described in this section. This includes expenses for persons who are not otherwise eligible for Medicaid (such as a non-disabled, non-aged spouse).

The amount of the expense allowable is determined according to the following:

The portion of the expense assumed by a third party, whether legally liable or not, negates the individual's responsibility to pay; therefore, such medical expenses cannot be considered against the spenddown. This includes the portion of any allowable medical expense paid by Medicare or other health insurance. The portion not covered by insurance (such as the copayment or deductible) or not assumed by another third party is allowable. Prescription drug expenses which are not covered under the Medicare Part D plan are allowable if an exception to coverage has been rejected by the plan. See 7532.2 for exceptions when expenses are allowable when paid by a third party.

Current expenses must be incurred and do not actually have to be paid to be allowed against the spenddown.

For due and owing expenses the following rules apply: For unpaid expenses, the total amount due and owing on the first day of the base period is allowable, except for the portion used in a previous base or obligated by a third party. Bills used against a prior spenddown may be allowed in a subsequent base period only if the prior spenddown was not met. Only the portion still due and owing on the first day of the current base is allowable. For expenses paid with a loan or credit card, only the unpaid portion of the loan or credit card balance attributable to the original medical expense is allowable. This is determined by subtracting all payments made on the loan or card balance from the original expense amount less any third party payments. Verification of the initial medical expense as well as payments made are required. A long term care share of cost (nursing home patient liability, HCBS client obligation, or PACE participant obligation) determined by the agency for a covered month is never allowable as a medical expense against a Medically Needy (MN) spenddown, even if still due and owing by the recipient or spouse.

Otherwise allowable medical expenses that have already been applied as a pre-tax payroll income deduction per 7241(1)(a) may not also be applied as a medical expense against a spenddown.