Nebraska’s Medicaid spend-down lets you qualify for coverage when your income is above the standard Medicaid limit, as long as you have medical expenses large enough to absorb the difference. The program, run by the Nebraska Department of Health and Human Services (DHHS), is officially called the Medically Needy or Share of Cost program. Each month, you obligate the gap between your adjusted income and a figure called the Medically Needy Income Level (MNIL) toward medical bills; once that gap is covered, Medicaid pays the rest for that month.1Nebraska DHHS. Share of Cost For people needing nursing home care, a second kind of spend-down also applies: reducing countable assets to $4,000 or less.
How the Monthly Share of Cost Is Calculated
The math is subtraction. DHHS takes your adjusted monthly household income and subtracts the MNIL for your household size. What’s left is your share of cost, the dollar amount you must obligate toward medical expenses before Medicaid pays anything that month.1Nebraska DHHS. Share of Cost
A three-person household with $1,000 in adjusted monthly income and an MNIL of $492 would have a share of cost of $508. A single person earning $1,200 a month would need $808 in allowable medical expenses before coverage kicks in.
Each month stands alone. If you don’t meet your share of cost in a given month, Medicaid pays nothing for that month, and there’s no carryover of the unmet amount into the next month.2Nebraska DHHS. Share of Cost Provisions
Medically Needy Income Levels by Household Size
The MNIL numbers currently published by DHHS are:1Nebraska DHHS. Share of Cost
- 1 person: $392
- 2 people: $392
- 3 people: $492
- 4 people: $584
- 5 people: $675
- 6 people: $775
- 7 people: $867
- 8 people: $967
- 9 people: $1,059
- 10 people: $1,150
These thresholds sit at roughly 30% of the federal poverty level, one of the lower MNILs in the country.3MACPAC. Medicaid Income Eligibility Levels as a Percentage of the Federal Poverty Level A modest income can still produce a substantial monthly obligation.
Who Can Use the Spend-Down Pathway
The Medically Needy program is open to people who meet every other Medicaid eligibility rule except the income limit. DHHS lists the groups it’s designed for:1Nebraska DHHS. Share of Cost
- Aged, blind, or disabled individuals
- Low-income parents and families
- Nursing facility residents and people on home and community-based waivers, including the Aged and Disabled Waiver and the Developmental Disability Waiver
- People with high, ongoing monthly medical costs
You also have to meet Nebraska’s resource limits if a resource test applies to you. The limits are $4,000 for a single person and $6,000 for a two-person household, with $25 added for each additional family member.4Nebraska DHHS. Medicaid Eligibility Several assets don’t count: your primary home, one vehicle, property used in a trade or business, irrevocable burial funds, and ABLE (Enable) savings accounts up to $100,000 for people who became blind or disabled before age 26. Children under 18 and eligible pregnant women aren’t subject to the resource test.
What Counts Toward Your Share of Cost
Almost any medically necessary service or supply counts, even things Nebraska Medicaid wouldn’t normally cover.5Nebraska DHHS. Share of Cost Provisions Allowable expenses include:
- Physician visits, dental care, medical equipment, and prescription drugs
- Medical and Medicare premiums, deductibles, and co-pays from other insurance (often deducted from income before the share of cost is even calculated)
- Medically necessary over-the-counter medications
- Mileage for personal vehicles, or the actual cost of other transportation, for medical care
- Meals up to $12 per day and reasonable lodging when care requires being away from home for 12 or more hours
- Case management fees from agencies such as an Area Agency on Aging
Medical expenses incurred by other household members can also be applied.1Nebraska DHHS. Share of Cost Room and board cannot.2Nebraska DHHS. Share of Cost Provisions
If you have Medicare, workers’ compensation, or other insurance, those claims go first. Only what you still owe after the other insurer pays counts toward your spend-down.2Nebraska DHHS. Share of Cost Provisions
How You Prove You Met It Each Month
DHHS mails most participants a monthly form called the Record of Health Cost – Share of Cost – Medicaid Program, or Form EA-160. You take it to your medical providers, who record the services and costs as you go.6Nebraska DHHS. Record of Health Cost – Share of Cost Form Instructions The provider who delivers the final service needed to meet your share of cost signs the form and sends the white copy to the DHHS Claims Processing Unit in Lincoln. You keep the pink copy; the provider keeps the gold.
Medicaid won’t process claims for the month until that form arrives and your eligibility is updated. Incomplete forms get rejected or delayed, so every field should be filled in. If the form runs out of space before you meet the share, call the DHHS automated voice response system at 1-800-383-4278.
The monthly form doesn’t apply if you live in a nursing home or receive services under the Aged and Disabled Waiver or Developmental Disability Waiver. In those cases, you pay your share of cost directly to the care provider each month.1Nebraska DHHS. Share of Cost
Deductions Taken Before the Share of Cost Is Set
Your share of cost isn’t based on raw gross income. Certain deductions come off first, and what qualifies depends on your living situation.
If you’re in a nursing facility or other medical institution, allowable deductions include a personal needs allowance, guardian or conservator expenses up to $10 per month plus court-ordered accounting and bonding fees, a shelter allowance for maintaining a home you may return to (allowed for up to six months), and the cost of medical services the facility doesn’t provide, including insurance premiums.7Cornell Law Institute. 477 Neb. Admin. Code Ch. 25 Section 003
If you’re on a home and community-based services waiver, deductions include a personal needs allowance (which varies by living arrangement and waiver type), guardian or conservator expenses, and medical costs including insurance premiums for anything the waiver provider doesn’t cover.
If you’re medically needy but not institutionalized, you meet the share of cost by obligating payment toward medical and remedial expenses, including premiums, until your countable income falls to the MNIL or below.
Asset Spend-Down for Nursing Home Coverage
Spend-down means something different when you’re applying for Medicaid to pay for nursing home care. Here, the issue is assets, not monthly income. Countable assets have to be at or below $4,000 before Medicaid will pay.
You can reduce countable assets by spending them on legitimate purposes: paying off debts like mortgages, credit cards, and car loans; repairing or modifying your home (which stays exempt); prepaying funeral and burial costs through an irrevocable funeral trust; buying exempt assets such as a vehicle or household furnishings; and paying for medical care or equipment insurance doesn’t cover.8Nolo. Safe Ways to Spend Down Your Assets to Qualify for Medicaid Caregiver agreements that pay a family member for services actually delivered are allowed, but prepaying for services not yet rendered is treated as a disqualifying gift.
The Five-Year Look-Back
Nebraska uses a 60-month look-back period. If you gave assets away or sold them below fair market value during the five years before applying, DHHS imposes a penalty period during which Medicaid won’t pay for nursing home care.9Nebraska DHHS. Deprivation of Resources Policy The penalty length equals the value of the transferred assets divided by the current private-pay nursing home rate. A $35,000 transfer at a $5,000 monthly rate produces a seven-month penalty. Any partial month is converted to a dollar figure and added to your share of cost for that month.
If You’re Married: Spousal Protections
When one spouse enters a nursing home, the other isn’t required to spend down to the same limit. Nebraska’s 2026 Community Spouse Resource Allowance ranges from a minimum of $32,532 to a maximum of $162,660.10Nebraska DHHS. Community Spouse Resource Allowance The spouse staying at home keeps the greater of half the couple’s combined countable assets, up to the maximum, or the minimum floor.
For income, the 2026 Minimum Monthly Maintenance Needs Allowance is $2,644 per month. If the at-home spouse’s own income is below that, they can keep part of the nursing home spouse’s income to reach it.11Nebraska Department of Insurance. Spousal Impoverishment Protection Law – 2026 The spouse in the nursing home keeps a $75 personal needs allowance each month ($90 for veterans) and can use income for Medicare supplement premiums; the rest goes toward care.
DHHS assesses resources during the month of admission. Once the community spouse’s protected share is set, the applicant generally has 90 days from the eligibility notice to transfer assets so only the permitted amount remains in their name.10Nebraska DHHS. Community Spouse Resource Allowance
Estate Recovery After Death
Nebraska can seek repayment from a Medicaid recipient’s estate after death. Under Neb. Rev. Stat. § 68-919, recovery applies to recipients who were 55 or older when they received benefits, or who lived in a medical institution and weren’t expected to return home.12Nebraska Legislature. Neb. Rev. Stat. Section 68-919 DHHS files as a creditor against the estate rather than placing liens during the recipient’s lifetime.13Nebraska DHHS. Medicaid Estate Recovery
The assets subject to recovery include bank accounts, real property, vehicles, stocks, certificates of deposit, assets in trusts that became irrevocable at death, joint tenancy property, transfer-on-death deeds, and certain insurance or annuity proceeds. A home that was exempt during life can be subject to recovery after death.
Recovery is barred if the recipient leaves a surviving spouse, a child under 21, or a child who is blind or permanently disabled. The state also can’t foreclose on a home where a sibling with an equity interest lived for at least one year before institutionalization, or where an adult child lived for at least two years and provided care that delayed institutional placement. DHHS may waive or reduce claims for undue hardship. The statute of limitations is five years from the triggering event, usually the death of the recipient or surviving spouse.
How to Apply
There isn’t a separate Medically Needy application. You file a standard Nebraska Medicaid application and write in the comments section that you want to be considered for the Medically Needy program.1Nebraska DHHS. Share of Cost DHHS calculates your adjusted monthly income, compares it to the MNIL for your household size, and sets your share of cost. If you meet the other eligibility rules, you’re enrolled.
Nebraska’s rules allow retroactive eligibility for up to three months before your application date, as long as you would have qualified in those months. DHHS proposed limiting that lookback through a Section 1115 waiver but withdrew the proposal, so the three-month retroactive period remains in place.14Nebraska DHHS. Medicaid Public Notices