Virginia Medicaid Spend Down

Why Virginia's Spend-Down Matters

Several states require a Qualified Income Trust (also called a Miller Trust) when an individual's income exceeds the Medicaid eligibility threshold. Virginia does not. As a medically needy state, Virginia lets applicants whose income exceeds the limit qualify by documenting medical expenses that offset the excess. This is called the spend-down.

For adults with disabilities who receive SSDI, DAC benefits, or other income above the Medicaid limit, the spend-down pathway preserves access to Medicaid-funded services — including DD waiver supports — without the cost and complexity of establishing and maintaining a trust.

The Income Thresholds

Virginia operates two distinct Medicaid income limits relevant to adults with disabilities:

Standard ABD Medicaid: The income limit for Aged, Blind, or Disabled Medicaid is $1,064 per month in 2026.

Long-Term Care (LTC) Medicaid: For individuals receiving DD waiver services (CL, FIS, or BI waivers) or other long-term care services, the income limit increases to 300% of the SSI FBR — $2,982 per month in 2026. This higher threshold means most SSI recipients and many SSDI/DAC beneficiaries qualify for waiver services without needing a spend-down.

The spend-down becomes relevant when income exceeds the applicable threshold. For waiver recipients, that means monthly income above $2,982.

How the Spend-Down Calculation Works

The spend-down is straightforward math. Take the individual's total monthly income, subtract the applicable Medicaid income limit, and the difference is the "excess income" that must be offset by medical expenses.

For example, an individual receiving $3,200/month in combined SSDI and DAC benefits who needs DD waiver services:

• LTC Medicaid income limit: $2,982
• Excess income: $3,200 − $2,982 = $218
• Required monthly medical expenses to qualify: $218

If the individual's incurred medical, therapeutic, and disability-related expenses total at least $218 per month, they meet the spend-down and qualify for Medicaid.

What Counts as a Qualifying Medical Expense

Virginia accepts a range of medical and disability-related expenses for the spend-down:

• Prescription medications and copays
• Therapy sessions (physical, occupational, speech, behavioral)
• Medical equipment and supplies
• Dental care
• Vision care
• Mental health services
• Personal care assistance costs
• Transportation to medical appointments
• Insurance premiums (including Medicare Part B)

The expenses must be incurred — meaning the individual is responsible for paying them — but they do not necessarily need to be paid in full before the spend-down is calculated. The incurred obligation is what counts.

The Patient Pay Obligation

There is a catch that surprises many families. If an individual's income exceeds the Personal Maintenance Allowance — $1,641 per month for in-home waiver recipients in Virginia in 2026 — all income above that allowance must be paid directly to the waiver service provider as a monthly copay. This is called the patient pay obligation.

The patient pay is different from the spend-down. The spend-down determines eligibility. The patient pay determines how much of the service cost the individual pays out of pocket once eligible. Even after qualifying through a spend-down, the individual may owe a significant monthly payment to their providers.

Strategies to manage patient pay include:

• Sheltering income in an ABLEnow account (ABLE-to-Work contributions reduce countable income in some calculations)
• Impairment-Related Work Expenses that reduce countable earned income
• Proper documentation of all deductible medical expenses

Applying for Medicaid With a Spend-Down

The spend-down is calculated as part of the Medicaid application process. When applying through CommonHelp or the local DSS, the applicant reports their income and submits documentation of their medical expenses. The eligibility worker calculates whether the documented expenses offset the excess income.

Key documents to submit:

• Proof of all income sources (SSI/SSDI award letters, pension statements, DAC benefit notices)
• Medical bills and receipts for the coverage period
• Pharmacy statements showing prescription costs
• Therapy and service invoices
• Insurance premium statements

The spend-down is recalculated at each Medicaid renewal (every 12 months in Virginia). Maintaining organized records of ongoing medical expenses throughout the year prevents delays during the renewal process.

The Virginia SSI at 18 & Adult Disability Benefits Guide covers the complete Medicaid eligibility process, including the spend-down calculation, patient pay obligations, and how to coordinate income sheltering with ABLEnow accounts.

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