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N.J.A.C. 10:70-6.1 This file includes all Regulations adopted and published through the New Jersey Register, Vol. 57 No. 12, June 16, 2025 NJ - New Jersey Administrative Code > TITLE 10. HUMAN SERVICES > CHAPTER 70. MEDICALLY NEEDY PROGRAM > SUBCHAPTER 6. MEDICAL SPEND- DOWN § 10:70-6.1 Eligibility under medical spend-down (a) Persons who are eligible in all respects for the Medically Needy Program, except that the countable income of the budget unit as determined in subchapter 4 exceeds the medically needy income level, may establish eligibility for payment of covered services benefits through medical spend-down. 1. Medical spend-down is a process whereby the excess countable income of a budget unit is offset by the allowable incurred medical expenses of the budget unit. 2. Spend-down liability is the amount by which the countable income of the budget unit exceeds the medically needy income level as determined under the provisions of this subchapter. (b) The retroactive eligibility period is the three calendar months immediately preceding the month in which application for benefits is made. For each of the three months, a monthly spend-down liability is established. The monthly spend-down liability shall be the amount by which actual countable income of the budget unit for that month exceeds the medically needy income level for that month. 1. Within the retroactive eligibility period, income eligibility is established for any month in which the allowable incurred medical expenses of the budget unit exceed the spend-down liability established for that month. 2. Eligibility for payment of covered services is established effective with the first day of each or any month in which the allowable incurred medical expenses of the budget unit exceed the spend-down liability only for those claims for services that are not covered under the Medically Needy Program and were not used to meet spend-down liability. (Note: The effective date to be entered in the Medicaid Status File is the day after the day that spend-down liability is met.) (c) Except for retroactive eligibility, income eligibility for the Medically Needy Program is determined using a six-month prospective eligibility period. The six-month period begins with the month in which application for benefits is made. For the full six-month period, a six-month spend-down liability is established. The six- month spend-down liability shall be the amount by which the countable income of the budget unit, as determined at N.J.A.C. 10:70-4, exceeds the budget unit's medically needy income level for the full six- month period. 1. Eligibility for medically needy benefits is established effective with the first day of the month in which the allowable incurred medical expenses of the budget unit exceed the six-month spend-down liability only for those claims for services that are covered under the Medically Needy Program and were not used to meet spend-down liability. (Note: The effective date to be entered on the Medicaid Status File is the day after the day spend-down liability is met.) 2. Changes in the countable income of the budget unit and/or the size of the budget unit during the six- month prospective period require a recalculation of the six-month spend-down liability. 3. In order to receive program benefits, upon meeting the spend-down liability, all other factors of program eligibility must also be met.