Medicaid Spend Down: Implications for Long-Term Services and Supports and Aging Policy
Medicaid provides an important safety net for people who are poor or become poor, either because of the high costs of health and longterm care services or for other reasons. The transition from non-Medicaid to Medicaid status can be difficult, especially since it is generally associated with illness, disability, and declining income and assets. The high cost of long-term services and supports (LTSS) results in catastrophic out-of-pocket costs for many people needing services, some of whom spend down to Medicaid eligibility.
For people who have been independent all of their lives, transitioning to Medicaid means depending on a means-tested welfare program for their health and long-term care services. Moreover, people transitioning to Medicaid are a substantial portion of state Medicaid expenditures. In an effort to avoid exhausting their resources and relying on Medicaid, others depend on unpaid family support or go without needed services.