What is meant by 'spend down' in the context of Medicaid?

'Spend down' refers to a financial strategy used in the context of Medicaid that allows individuals who have high medical expenses to meet the financial eligibility requirements for the program. In many cases, individuals and families must have limited income and assets to qualify for Medicaid benefits. If a person’s income exceeds these limits, they can "spend down" their excess resources on qualifying medical expenses.

This process can include paying for medical bills, long-term care expenses, or other health-related costs until their financial status falls below the Medicaid eligibility thresholds. As such, 'spend down' effectively helps individuals with high medical expenses reduce their assets or income to gain access to essential health coverage provided by Medicaid.

The other options do not accurately reflect the specific context of Medicaid. While reducing income for tax benefits, saving on premiums, or collecting taxes from wealthy individuals might involve financial strategies, they do not relate to the process of qualifying for Medicaid through the expenditure of resources on healthcare needs.