The New York Department of Health explains that the Medicaid excess income program, also known as the spenddown or surplus income program, may help you pay medical bills even if you earn monthly “excess income.” 

Excess income is the difference between the monthly Medicaid income limit and your gross monthly income, subject to deductions based on your personal circumstances. For example, your age or disabilities may reduce the gross monthly income attributable to you. 

What is the one-month eligibility rule? 

You may have bills for outpatient health care, prescriptions, lab work, medical supplies or dental care. If your bills in a month are at least equal to your excess income in that month, Medicaid will treat your excess income like a deductible and pay your bills over that amount for the remainder of the month. You may submit paid or unpaid bills each month your outpatient bills exceed your excess income. You may also be eligible for monthly reimbursement for long-term care. 

What is the six-month eligibility rule? 

If you require inpatient hospital care, you may be eligible for Medicaid inpatient services in addition to outpatient services. To qualify, your paid or unpaid medical bills must equal or exceed your monthly excess income for six months. 

What is the pay-in program?  

If you need health care in any month but have no medical bills, you can “pay in” your monthly excess income amount. By paying this amount, you are eligible for Medicaid health care in that month. If you do not activate this program and you do not incur medical costs equal to or greater than your excess income, your Medicaid coverage will not be effective that month. 

When you enroll in the excess income program, your past medical bills may count toward your excess income amount, subject to conditions.