If you live in a state with a medically needy program, then you can use medical expenses you incur to reduce, or “spend down,” your income to qualify for Medicaid. States establish a spend-down period, during which they look at your income and expenses to see whether you qualify for coverage. You must re-qualify for Medicaid after each spend-down period. Spend-down periods range from one to six months.
For example, if your state has a spend-down period of six months, then you must show that you have enough medical expenses within the six months to satisfy your spend-down (that is, to lower your income below the medically needy income limit). Once you have enough expenses, then you are eligible for Medicaid for the rest of the six months. After the six months is up, you must satisfy the spend-down again.