Earning slightly too much for Medicaid doesn’t mean you’re out of options in New York. The state’s Excess Income program — also called “spend-down” or “surplus income” — lets people over the income limit still qualify, month by month, by showing medical bills that offset the difference.
How “excess income” works
Per New York State’s Department of Health, your excess income is simply the gap between your countable monthly income and the Medicaid income limit — treated like a deductible. If you can show medical bills equal to that gap in a given month, Medicaid pays for your additional covered costs for the rest of that month.
To use this program you have to be in one of these groups: under 21, age 65 or older, certified blind or disabled, pregnant, or the parent of a child under 21.
The two paths to spend down
| Outpatient path | Inpatient/hospital path | |
|---|---|---|
| What triggers it | Outpatient care, prescriptions, medical supplies, home care | Hospital admission or hospital bills |
| Bills needed | Equal to your excess income for one month | Equal to your excess income for six consecutive months |
| Coverage you get | One month of Medicaid at a time | Six months of Medicaid |
| Repeat needed? | Yes — every month you need coverage | Every six months |
Long-term care services in the community — adult day health care, personal care services, the Assisted Living Program, and home care — fall under the outpatient path. Your caseworker determines specific eligibility for these once you’re in the program.
What counts as a bill — and it doesn’t have to be paid
This is the detail that surprises people most: bills count toward your excess income whether or not you’ve actually paid them. Once a provider bills you, you can submit it. What counts:
- Doctor, dental and clinic visits, eye exams, lab tests, prescription drugs (the provider does not need to be Medicaid-enrolled to count toward your excess income — though once you’re covered for the month, only Medicaid-enrolled providers get paid)
- Transportation to and from medical appointments, with a receipt
- Therapists, nurses, personal care aides and home health aides — as ordered by a doctor (personal care aides must be approved through the Community Alternative Services Agency or your local Department of Social Services)
- Copayments and deductibles, including Medicare Part D
- Medical equipment, supplies, prosthetics, hearing aids, eyeglasses, and doctor-ordered over-the-counter drugs
- Costs paid by EPIC or ADAP in the three months before you applied — not just your copay, the full amount those programs paid
- Chiropractor visits and other services Medicaid itself doesn’t cover
Cosmetic and non-medical costs don’t count. And if you have Medicare or private insurance, only the portion they don’t pay counts toward your excess income.
Old bills can still work
You’re not limited to bills from this month. Unpaid bills can be used indefinitely, as long as the provider could still legally collect on them — even an old hospital bill from years ago that resurfaced as a collection notice. Paid bills have a tighter window: they must be from services provided and paid within the three months before you applied, and they can only be applied for up to six months total.
Family bills count too — for your spouse or children under 21. If you’re under 21 and living with your parents, their bills toward your excess income can count as well.
No bills this month? There’s a Pay-In option
If you don’t have medical bills but need coverage for a specific month, you can pay your excess income amount directly to your local Department of Social Services instead. Without bills or a Pay-In payment, you simply won’t have Medicaid coverage that month — it isn’t retroactive on its own.
What this means if you’re arranging home care
If home care is the actual goal, spend-down status doesn’t automatically get you personal care hours — that still runs through a clinical assessment and your Managed Long Term Care plan, same as for anyone else on Medicaid. What spend-down does is get you Medicaid coverage in the first place when your income is a little too high to qualify outright. From there, arranging home care or private-pay care to bridge the gap while paperwork moves is often the practical next step, and it’s one we help families sort out regularly. Call (718) 232-2777 or use our contact page if you’re trying to work out what applies to your situation.
Frequently asked questions
What is Medicaid spend-down in New York?
A program that lets people whose income is above the Medicaid limit still qualify by showing medical bills equal to the difference (their “excess income”) each month, or for six months at a time through the hospital-care path.
Do medical bills need to be paid to count toward spend-down?
No. Paid or unpaid bills both count, as long as the provider has actually billed for the service.
Can home care bills count toward my excess income?
Yes — personal care aides and home health aides ordered by a doctor can count, with personal care aides needing approval through the Community Alternative Services Agency or your local Department of Social Services.
What if I don’t have enough medical bills in a given month?
You can use the Pay-In option — paying your excess income amount directly to your local Department of Social Services for that specific month — or you won’t have Medicaid coverage for that month.
Can I use old medical bills toward spend-down?
Unpaid bills can be used indefinitely as long as they’re still legally collectible. Paid bills only count if the service was provided and paid within the three months before your application, and only for up to six months total.
Who is eligible for the Excess Income program?
You must be under 21, age 65 or older, certified blind or disabled, pregnant, or the parent of a child under 21.
Income limits change annually and are set separately from the mechanics described here, which are checked against health.ny.gov as of 27 September 2026. Confirm your current income limit and excess income amount with your local Department of Social Services.
