California Department of Social Services - State Hearings Division
Notes from the Training Bureau - March 11, 1998

Reference: Medi-Cal Eligibility Procedures Manual (MEPM) § 9L

Pursuant to the Principe v. Belshé case, for all Medi-Cal applications made on or after February 1, 1998, individuals who have available excess property throughout the month of application, but fail to spend that property below the applicable property limit before the end of the application or subsequent months, may retroactively meet spend down procedures and establish Medi-Cal eligibility in the month of application by spending the excess property on qualified medical expenses.

This "retroactive" spend down does not apply to the three months prior to the month of application. It only applies beginning with the month of application. This procedure is for the benefit of Medi-Cal applicants who, for whatever reason, are not able to spend the excess property in the month of application or subsequent months.

For example, if a single man with $3000 in available nonexempt property is hospitalized in February 1998 and applies for Medi-Cal on February 27, 1998, but is unable to spend the excess $1000 property (the property limit being $2000) by February 28, he would be able to establish Medi-Cal eligibility for February 1998 if in March 1998 or thereafter he spent the excess $1000 on qualified medical expenses.

Qualified medical expenses are defined as bills that are incurred in the month at issue by the individual or spouse, by any member of the individual’s Medi-Cal Family Budget Unit (MFBU) or the individual’s children who are not in the MFBU but live with the individual.

This ACWDL also states that before Principe spend down procedures should be considered, counties must first determine whether the property at issue is available. If the individual is unconscious, comatose or incompetent at any time during the month at issue, the property would be considered unavailable and there would be no need to consider Principe spend down.

If the applicant is competent and able to complete spend down in the month at issue, the applicant could spend the property on items other than qualified medical expenses in order to establish Medi-Cal eligibility.

This ACWDL also refers to a present policy addressed in MEPM § 9L that is used whenever an applicant or recipient reduces excess property in a month by paying, in that same month, current or future medical expenses in order to establish eligibility in that month.