Texas Spend-Down Requirements for Medicaid

Traditional Medicaid programs in Texas have income and asset limits that someone within a covered group must not exceed in order to qualify for the program. However, there are additional programs for those who exceed these limits but have special circumstances. In this case, the medically needy program has been established to help those who don’t qualify for traditional Medicaid but who still need medical financial assistance.

Covered Groups

• While traditional Medicaid in Texas covers several groups, pregnant women and families with children may qualify for the medically needy program if they don’t qualify for traditional Medicaid. According to the Kaiser Commission on Medicaid and the Uninsured, Texas has the only medically needy program in the nation that does not cover the elderly and disabled.

Income Limits

• Traditional Medicaid in Texas has income limits for most covered groups, including pregnant women and families with children. To qualify for the medically needy program, these groups would need to exceed those imposed income limits of the Medicaid and Temporary Assistance for Needy Family programs. These limits are incomes of less than 185 percent of the Federal Poverty Level for pregnant women and children up to 12 months of age, 133 percent of the poverty level for children 12 months to 6 years and 100 percent of the poverty level for children 6 to 19.

High Medical Expenses

• These groups must have medical expenses high enough that it “spends down” additional earnings that disqualified them for traditional Medicaid to below 133 percent of the poverty level. Those who fall into this category still have a medical and financial need for affordable health insurance and may qualify for the medically needy program in order to receive help for those expenses.