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2. State supplementary payments that meet the conditions specified in 42 C.F.R. §§435.232 and 435.234, and 3. Medical and remedial care expenses incurred by the individual or by a financially responsible relative.

The deduction of incurred medical expenses allows individuals aged 65 and older, and those who have blindness or a disability, to spend down excess income to become eligible for Medicaid. These spenddown requirements may differ depending on whether the state has a medically needy program for individuals who are age 65 or older or who have blindness or a disability.

States with a medically needy program: If a 209(b) state offers medically needy coverage to individuals who are age 65 or older, or who have blindness or a disability, they must allow specified groups of individuals (age 65 or older, or who have blindness or a disability) to spend down to the income standard for the mandatory 209(b) group. The specified groups are:  SSI recipients  Deemed SSI recipients (including adult children with disabilities)  Eligible spouses of SSI recipients  State supplement recipients and  Individuals who are eligible for but not receiving a state supplementary payment.

Individuals who are age 65 or older, or who have blindness or a disability, and who do not fall into one of the categories listed above may be required to spend down excess income to the state’s medically needy income standard.

States that do not have a medically needy program: 209(b) states that do not offer medically needy coverage to individuals who are age 65 or older, or who have blindness or a disability, must allow all individuals age 65 or older, or who have blindness or a disability, to spend down their excess income to the income standard for the mandatory 209(b) group.