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Learn About Medicaid’s Medically Needy Program Explained

The Medically Needy program, sometimes referred to as the Share of Cost program, is a limited Medicaid program. The Medically Needy Program is available to beneficiaries who do not qualify for traditional Medicaid because of an income that is too high or assets that exceed the maximum amount, but who still need help paying for medical expenses. The program provides eligible households with Medicaid coverage benefits, but it first requires participants to pay a certain amount in medical costs each month.

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What is “Share of Cost”?

The term “Share of Cost” refers to the amount of money that a Medically Needy household must pay on its own (out-of-pocket) toward medical expenses each month before Medicaid assistance becomes available. The “share of cost” works similarly to an insurance deductible. Once the beneficiary pays the “share of cost” (deductible) in a given month, Medicaid, like an insurance company, will cover the rest of the month’s allowable medical expenses. The “share of cost” minimum expense is not a fixed amount, but instead depends on the household’s size and amount of monthly income.

Each household participating in the Medically Needy program has an established monthly “share of cost.” Once a household participating in the Medically Needy Program pays this monthly “share of cost” toward allowable medical expenses, the household will be eligible for Medicaid benefits throughout the rest of the month. For instance, a household may have a “share of cost” set at $700. If the household pays $700 in eligible medical bills on March 12, the household will have met its share of cost for the month and will be eligible for Medicaid coverage through March 31. The share of cost is subject to change depending upon changes in household circumstances and composition, such as income and number of members. Therefore, participating households must notify the state agencies of any household changes.

What does the Medically Needy program cover?

Households participating in the Medically Needy program must submit copies of medical expenses to the state agency that administers Medicaid and the Medically Needy program. Some examples of expenses that Medically Needy households may submit to meet the monthly share of cost expenses include:

  • Medical bills paid or incurred during the current month.
  • Health insurance premiums (including Medicare, HMO and prepaid plan premiums).
  • Doctor-prescribed medical goods and services (including prescription drugs and doctor visits).
  • Costs of transportation to receive medical care.

Beneficiaries can submit proof of these expenses in the form of received bills, receipts for paid bills or canceled checks for paid bills. Beneficiaries can submit proof of medical expenses to the approved state agency. Proof of medical expenses should include the following information:

  • Amount of expense
  • Date of expense
  • Dates and amounts of any payments for expenses

Some medical expenses, such as payments for over the counter medical supplies, are not covered by the Medically Needy program and therefore cannot be submitted to meet the monthly share of cost. Like Medicaid, Medically Needy benefits will not be accepted by every health care provider. Like full Medicaid beneficiaries, Medically Needy households will need to work with enrolled Medicaid providers in order to receive cost-free medical services.