Volume 1, Issue 2

Spending Down for Medicaid Eligibility in Section 209 (B) States: Should the Procedures Be Changed? – Elizabeth T. Melady

In analyzing the income requirements for Medicaid eligibility, Elizabeth Melady finds fault with the “section 209(b)” state spend-down provisions. Generally, the Social Security Act requires states to provide Medicaid benefits automatically to those receiving categorical welfare assistance. However, Ms. Melady explores the history of the section 209(b) provision, which alternatively allows states to provide Medicaid benefits only to persons eligible for Medicaid on January 1, 1972 , without adjustment for medical inflation rates. Ms. Melady asserts this results in a discriminatory outcome — the welfare recipient seeing favorable treatment over a second person who must spend down to applicable levels, despite the fact that both may have the same income with only the sources being different. In seeking a solution, Ms. Melady finds that an Equal Protection claim under the Fourteenth Amendment would be inadequate because of the U.S. Supreme Court’s deference to Congress on social and welfare legislation. Although somewhat more hopeful, Ms. Melady finds that challenges under state constitutions will not sufficiently allay the problem because of a lack of uniformity form state to state. Finally, Ms. Melady calls for federal legislation to alter the methods that section 209(b) states use to calculate Medicaid eligibility, specifically proposing that only the amount of income, and not its source, be relevant to the Medicaid eligibility determination.