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N.J.A.C. 10:70-6.3 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 § 10:70-6.3 Application of medical expenses toward spend-down (a) In determining eligibility under medical spend-down, expenses are applied in the following order against the spend-down liability: 1. Medicare and other health insurance premiums, deductibles, or coinsurance charges incurred by a member of the budget unit; 2. Expenses incurred by the members of the budget unit for allowable medical expenses for services not covered under the Medically Needy Program (including covered services provided to members of the budget unit who are not members of a medically needy eligibility category); 3. Expenses incurred by budget unit members, who are also members of a medically needy eligibility category, for services covered by the Medically Needy Program; and 4. Costs paid in whole or in part by a public program of the State or a political subdivision of the State, which involves no Federal funds may be counted as an incurred medical expense to establish eligibility under a Medicaid spend-down. If such costs are covered under Medicaid, the costs are not allowable under spend-down. (b) Costs for health insurance premiums billed less often than monthly, shall be averaged over the period of coverage that the premium is intended to purchase and applied incrementally against spend-down liability. The applicant or beneficiary shall report to the county board of social services the cancellation of any such insurance. (c) If a member of a budget unit has arranged to make monthly payments toward a previously incurred medical expense thereby modifying the terms of the liability for the expense, the amount of the monthly obligation rather than the outstanding balance shall be applied against spend-down liability. (d) Any medical expenses may be applied against spend-down liability only once. However, incurred medical expenses in excess of those required to meet the spend-down liability for a budget period (which have not been applied against spend-down liability), may be applied against spend-down liability in future budget period so long as a member of the budget unit continues to have an express obligation for payment of the expense. 1. If, in any eligibility period, the budget unit does not meet its spend-down liability, the incurred medical expenses that were compared to that spend-down liability are not considered to have been used in meeting spend-down liability. Any such expenses may be applied to subsequent eligibility periods so long as the expenses remain allowable in accordance with N.J.A.C. 10:70-6.2. (e) In certain circumstances, it may be beneficial to program applicants or beneficiaries to delay the application of incurred medical expenses against spend-down liability. For example: An individual has sufficient incurred medical expenses to establish eligibility under medical spend-down in each of the three months of the retroactive eligibility period. However, during that period, he has no or few incurred expenses for services covered under the Medically Needy Program. The individual may elect to forego eligibility for the months of retroactive coverage and apply the incurred medical expenses against spend-down liability