Medicaid spend down: New estimates and implications for long-term services and supports financing reform. Final report
Medicaid provides an important safety net for people who are poor or become poor, either because of the high costs of health and long-term services and supports, or for other reasons. The transition from non-Medicaid to Medicaid status can be difficult, especially since it is often associated with illness, disability, and declining income and assets. The high cost of long-term services and supports results in catastrophic out-of-pocket costs for many people needing services, some of whom spend down to Medicaid. 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 services and supports. Moreover, spending for people transitioning to Medicaid is a substantial portion of state Medicaid expenditures.
This study examines transitions to Medicaid eligibility or Medicaid spend down by people age 50 and older over a 12-year period. Data for this study come from the 1996 to 2008 waves of the Health and Retirement Study, which has been merged with Medicare data to help establish Medicaid eligibility.