Financial eligibility requirements for Medicaid may need an overhaul to better support increasing palliative care demand among swelling populations of seriously ill seniors.
Roughly 36 states and the District of Columbia have established income-based Medicaid spend-down programs. These programs are designed for individuals with significant and complex health care needs whose income is too high to qualify for Medicaid benefits. In most cases, beneficiaries need to spend down their financial assets and income in order to become eligible.
The Medicaid spend-down thresholds have not kept pace with rising long-term care costs, according to Faris Flournoy, CEO of Flournoy Health Systems. The qualification process often has families facing a complex web of complicated paperwork, eligibility timelines and care decision-making during vulnerable stages of life, Flournoy said.
“The spend down process is typically very stressful,” Flournoy told Palliative Care News. “Older adults are burning through their savings to afford the cost of care, and it’s only when they completely run out of their personal funds that they qualify for Medicaid. This has become a big issue for families, especially as people are living longer and trying to navigate rules that were not built for the financial realities of today.”
Flournoy Health Systems Atlanta-based health system is the parent company of PrimeCare Home Care Services, which provides hospice, home care and chronic care management across 59 counties in Georgia and Indiana. The organization’s other services include home-based pediatric skilled and unskilled nursing, as well as Applied Behavior Analysis (ABA) therapy for children.
The challenges of qualifying for Medicaid spend-down programs have in some cases resulted in delayed care delivery and poorer quality of life, Flournoy said. Many seniors seeking this support have long, unpredictable declines throughout their illness trajectory and lack a formal caregiving network.
The “hardest hit” by the requirements are often seniors with an income that is just high enough not to meet Medicaid eligibility, but is not enough to pay for necessary care, he stated.
“A lot of times, this means people are having gaps in care while they try to navigate the system,” Flournoy said. “The people with the greatest risk are those who live in the gap. For serious and terminally ill patients, this delay … can change where they spend the final months of their life and the type of care they’re able to receive.”
Palliative care providers can make a significant impact on improved quality and access by forging stronger referral relationships across the health care continuum, according to Flournoy. Collaboration with hospitals, health systems, elder law professionals, family caregiving support groups and community organizations could help to mitigate some of the difficulties that come with Medicare spend down programs.
Hospice and palliative care providers need to understand that financial stress has now become “part of the clinical picture,” Flournoy said.
The spend-down challenges may be exacerbated by recent policy changes included in the One Big Beautiful Bill Act. Passed in 2025, the federal law required states to implement work and community engagement requirements in their Medicaid programs beginning Jan. 1, 2027. The legislation also included a budget reconciliation process that included significant cuts to Medicaid spending over the next 10 years.
The work requirements and spending clawbacks may cause thousands of low-income individuals to lose access to health care coverage, said Lucy Dagneau, senior director on the state and local campaigns team at the American Cancer Society Cancer Action Network (ACS CAN). The nation could see greater health disparities, particularly among underserved communities of color and rural-based families, Dagneau indicated.
An additional challenge is the variation between different state Medicaid spend down programs related to work requirements, she said.
Palliative care providers can work to advocate for change with their state Medicaid agencies, Dagneau said. Important for positive impact is developing comprehensive and wide-ranging communication plans that reach Medicaid beneficiaries through different educational and engagement avenues.
“ACS CAN is particularly concerned about the implementation of Medicaid work requirements. Bureaucracy and paperwork requirements will block access,” Dagneau told Palliative Care News in an email. “We know Medicaid is a lifeline for millions of people nationwide. The consequences of taking health insurance away from individuals are dire. The variation between states in how and when work requirements are implemented will further add to confusion and coverage loss and magnify the reality that where you live determines if you live.”
