What Does Medicaid Share of Cost Mean?

Understanding Medicaid Share of Cost

Medicaid Share of Cost refers to an amount of medical expenses certain Medicaid recipients must incur each month before their Medicaid benefits begin to cover services. This system allows individuals with incomes slightly above standard Medicaid limits to access healthcare assistance. It functions much like a deductible in private health insurance, where you are responsible for a specific amount of costs first. This approach ensures that individuals facing significant medical bills, who might otherwise be ineligible due to their income, can still receive support.

The Share of Cost represents the portion of an individual’s income considered “excess” beyond a state-defined income Level (MNIL). It is not a premium or co-pay, but an amount of medical bills that must be accumulated and documented. This system primarily applies to “medically needy” Medicaid programs, designed for individuals whose income or assets exceed regular Medicaid limits but who have substantial medical expenses. The purpose of a Share of Cost is to provide a pathway to Medicaid for those with high healthcare needs. Many states offer this pathway, though it may go by different names like “spend-down program” or “excess income program.”

The specific MNIL varies by state and can depend on household size. The Share of Cost amount is generally calculated as the difference between an individual’s countable income and the state’s MNIL. For example, if a state’s MNIL is $300 and an individual’s countable income is $600, their Share of Cost would be $300. This mechanism allows states to extend Medicaid coverage to specific groups, such as the elderly, blind, or disabled, as well as pregnant women and children, who have high medical costs relative to their income. The Share of Cost is distinct from asset spend-down, which involves reducing assets to meet eligibility limits.

Meeting Your Share of Cost

Meeting your Medicaid Share of Cost involves incurring eligible medical expenses within a month until the total equals or exceeds your determined amount. These are out-of-pocket expenses or bills from medical providers. You are responsible for paying, or owing, these initial medical bills yourself.

A range of healthcare expenses can count towards this monthly obligation. These include charges for doctor visits, prescription medications, and hospital stays. Medical equipment and supplies, such as eyeglasses, hearing aids, and durable medical equipment, also qualify if medically necessary and prescribed.

Other eligible expenses can include dental and vision care when medically necessary, and transportation costs to medical appointments. Private health insurance premiums for the Medicaid recipient can also be applied. In some cases, outstanding medical bills from previous months can count, provided they meet state-specific rules and have not been used previously. Home health services or long-term care costs are also includable.

You must keep accurate records, such as receipts and bills, as proof of incurred expenses. The Share of Cost is a monthly obligation, resetting at the beginning of each new month.

Medicaid Coverage After Meeting Share of Cost

Once your eligible medical expenses reach or exceed your monthly Share of Cost, Medicaid benefits become active for the remainder of that calendar month. Medicaid will then cover additional medical services you receive. Covered services include physician visits, hospital care, laboratory tests, and prescription drugs.

For individuals eligible for long-term care services, such as nursing home care or home and community-based services, Medicaid coverage for these can also activate. Coverage is limited to services within Medicaid’s scope for that specific state and program. Only medically necessary expenses included in the state’s Medicaid plan are covered.

Medicaid will pay for qualifying medical costs that exceed the Share of Cost amount for the rest of the month. The Share of Cost obligation resets at the start of each month. If ongoing Medicaid coverage is needed, the process of incurring and documenting medical expenses must be repeated monthly.