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Medicaid Spend Down in Illinois: 2026 Rules, Limits and Pay-In Option

By Modinul Islam Khan Updated November 10, 2026

Reviewed November 10, 2026. Medicaid spend down in Illinois (the state spells it “spenddown”) lets an older adult or a person who is blind or disabled get Medicaid even when their income or assets are above the limit for AABD Medical. You “spend down” each month by showing medical bills or receipts equal to your excess income, or by paying that amount to the state through Pay-In Spenddown. Once you meet it, Medicaid covers you from that day through the end of the month.

Spenddown exists in many states under different names. For the general idea and how other states handle it, see our Medicaid spend-down guide. This page covers the Illinois rules.

Quick answer: Illinois spenddown is mainly for AABD Medical (age 65+, blind, or disabled). There is no spenddown for the ACA Adult group.
2026 income standard: 100% of the federal poverty level, about $1,330 a month for one person and $1,803 for two, before Illinois’s $25 income disregard.
AABD Medical asset limit: $17,500 (for one person or a couple), in effect since May 12, 2023 and still listed for 2026.
Spenddown amount: your countable income minus the income standard (plus excess assets, for AABD Medical).
How to meet it: each month, with unpaid bills, paid receipts, a Pay-In Spenddown payment to HFS, or a mix.

What spenddown means in Illinois

The Illinois Department of Human Services (IDHS) policy manual says a spenddown case is approved when countable income is above the income standard. For AABD Medical, it can also be approved when countable resources are above the resource limit. The extra income, and for AABD Medical the extra resources, become your spenddown amount.

The Illinois Department of Healthcare and Family Services (HFS) brochure on spenddown says it “works a little like an insurance deductible.” You are responsible for medical costs up to your monthly spenddown amount. After your bills or receipts reach that amount, you get a medical card for the rest of that month, and Medicaid pays for covered care after that point.

Who spenddown applies to

AABD Medical: people who are 65 or older, blind, or disabled. Most people with Medicare who use spenddown are in this group.
Not ACA Adults: IDHS policy states, “There is no spenddown for persons in the ACA Adult eligibility group.” That group is for adults 19 to 64 who are not on Medicare.
Families: IDHS also lists a separate Family Health Spenddown with its own standards. This page focuses on AABD.

2026 income standard and asset limit

AABD Medical uses 100% of the federal poverty level (FPL) as its income standard. HHS set the 2026 poverty guideline at $15,960 a year for one person and $21,640 for two. Illinois usually updates its medical standards each spring, so the 2026 figures below are expected to stay in place until the next update, around April 2027. For income limits across all Illinois programs, see our Illinois Medicaid income limits page.

2026 figure	1 person	2 people
AABD Medical income standard (100% FPL, monthly)	$1,330	$1,803
Income disregard (first $25 of income is not counted)	$25	$25 (a second $25 can apply in some couple cases)
AABD Medical asset limit	$17,500	$17,500

Monthly income figures are from the Illinois Department on Aging’s 2026 Medicaid income and resource chart, which notes the amounts do not include the $25 disregard. The $17,500 limit comes from IDHS Manual Release #23.38, which raised the AABD Medical resource limit for non-MAGI programs effective May 12, 2023. The AABD cash limits did not change. Some HFS pages still show an older $2,000 figure, so ask your caseworker if you see conflicting numbers.

How your monthly spenddown amount is calculated

Your local DHS office figures your spenddown and mails you a notice that explains it. The basic steps are:

Add up your gross monthly income (Social Security, pension, wages, and so on).
Subtract the $25 income disregard and any other deductions that apply to you.
Subtract the income standard for your household size ($1,330 for one person in 2026).
Whatever is left is your monthly spenddown. If your countable assets are over $17,500, the excess can also be added for AABD Medical.

Illustrative example (not an actual case)

Say a single 70-year-old living at home gets $1,600 a month from Social Security and has $8,000 in the bank.

Gross income: $1,600
Minus $25 disregard: $1,575 countable income
Minus 2026 income standard of $1,330: $245 monthly spenddown
Assets of $8,000 are under $17,500, so nothing is added for assets.

In any month this person shows $245 in allowable medical bills or receipts (or pays $245 through Pay-In Spenddown), Medicaid covers them from that day through the end of the month. Your real amount depends on your full case, so rely on your DHS notice.

How to meet spenddown in Illinois

Spenddown runs month by month. Every month you choose whether to meet it, and how. You have three options.

1. Turn in medical bills or receipts

Bring or send unpaid bills or paid receipts that add up to your spenddown to your DHS caseworker or Family Community Resource Center. According to the HFS spenddown brochure:

Unpaid bills count if they are dated no earlier than six months before the month you use them.
Paid receipts count in the month you paid and for six months after.
Each charge can be used only once, but a partly used bill can go toward another month.
Your proof must show the service, the provider, who got the care, the date, and the cost.

If one large bill (such as a hospital stay) is more than your spenddown, it can become a “split bill.” You owe the part up to your spenddown, and the provider bills HFS for the rest. In some cases, the unused part of a bill that Medicaid does not pay can carry over to later months.

2. Use Pay-In Spenddown

Pay-In Spenddown lets you pay your spenddown amount straight to HFS instead of collecting bills. It is open to AABD spenddown clients who live in the community. People who get community services from the DHS Division of Rehabilitation Services or Division of Developmental Disabilities cannot take part.

You must enroll first, using Form HFS 458SP-4. You can get the form by calling the HFS Health Benefits Hotline at 1-800-226-0768 (TTY 1-877-204-1012) and asking for the Pay-In Spenddown Unit.
Each month you get a statement. Return it with your payment. HFS accepts money orders, cashier’s checks, Visa, and Mastercard. It does not accept personal checks.
You pay only for the months you want coverage, and you can pay ahead so your card arrives by the first of the month.
Anyone can pay for you as long as the statement goes back with the payment.
Overpayments are refunded, but HFS says refunds take at least 16 to 18 months.

3. Combine both

Pay-In clients can meet a month with some bills and a smaller payment. Bills still go to your DHS caseworker, not to the Pay-In Unit.

What medical expenses count

IDHS policy (PM 15-08-05) and the HFS brochure list allowable expenses, including:

Doctor, hospital, clinic, dental, podiatry, and chiropractic care
Prescription drugs, medical supplies, equipment, and eyeglasses
Medicare and other health insurance premiums, deductibles, coinsurance, and copays
In-home care, including Department on Aging Community Care Program cost-sharing and care bought from a private party
Therapy (physical, occupational, speech) and transportation to medical care (24 cents a mile if you drive yourself)
Over-the-counter items only when a doctor orders them

Costs already paid by your medical card or other insurance do not count. Also, if the state pays your Part B premium through a Medicare Savings Program, you cannot use that premium toward spenddown.

How often you have to meet it

Coverage starts on the day spenddown is met and ends on the last day of that month.
HFS says DHS and HFS have two working days to act after getting your bills or payment, and a card arrives in about seven days.
After six months in spenddown status, your case is reviewed monthly. If you have not met spenddown in any of the last six months, the case can be canceled and you must reapply. Pay-In cases are not canceled automatically for this reason.

You also still have to complete your yearly renewal. See our Medicaid renewal guide.

Spenddown vs. Medicare Savings Programs

If you have Medicare, check whether a Medicare Savings Program (MSP) fits before relying on spenddown. MSPs do not cover medical services. They pay Medicare costs, and they have no monthly spenddown.

Illinois 2026 MSP	Monthly income, 1 person	Monthly income, 2 people	What it pays
QMB (up to 100% FPL)	$1,330	$1,803	Part B premium, plus Medicare deductibles and coinsurance
SLIB (over 100% to under 120% FPL)	$1,331 to $1,596	$1,804 to $2,164	Part B premium
QI-1 (120% to under 135% FPL)	$1,597 to $1,796	$2,165 to $2,435	Part B premium

Illinois income figures are before the $25 disregard. The 2026 MSP resource limit is $9,950 for one person and $14,910 for a couple. Illinois calls the middle tier SLIB; Medicare.gov calls it SLMB. You can be on an MSP and AABD spenddown at the same time. In our example above, $1,575 in countable income falls in the SLIB range, so the state could pay that person’s Part B premium even in months they do not meet spenddown.

Nursing home and supportive living cases

Spenddown works differently for people in a nursing home or Supportive Living Facility. Instead of comparing income to the community standard, IDHS compares your income and nonexempt assets to the cost of your care (the greater of the private pay rate or the HFS rate). Most of your income then goes toward your care each month. Read more in our guides to Medicaid nursing home care and nursing home costs.

How to apply

Online: apply and manage your case through Application for Benefits Eligibility (ABE) at abe.illinois.gov.
In person: visit your local DHS Family Community Resource Center.
By phone: call the DHS line listed by HFS, 1-800-843-6154 (TTY 1-800-447-6404), to find out where to apply.

Not sure which program fits? Try our Medicaid eligibility tool. If you disagree with a spenddown notice, the HFS brochure says you have 60 days from the notice to appeal.

Frequently asked questions

What is the Illinois spenddown income standard for 2026?

For AABD Medical it is 100% of the federal poverty level: about $1,330 a month for one person and $1,803 for two in 2026, with the first $25 of income not counted.

Do I have to pay my medical bills to meet spenddown?

No. Unpaid bills count if they are dated no earlier than six months before the month you use them. Paid receipts also count, in the month paid and for six months after.

Can I just pay the state instead of collecting bills?

Yes, if you are an AABD spenddown client living in the community. Enroll in Pay-In Spenddown and send HFS your spenddown amount for the months you want coverage.

Can I spend down excess assets in Illinois?

For AABD Medical, yes. IDHS policy says countable resources over the $17,500 limit can be part of your spenddown amount when certain conditions are met. Ask your caseworker how this applies to you.

Is there spenddown for adults under 65 without Medicare?

Not in the ACA Adult group. Adults 19 to 64 who are disabled may be able to use AABD spenddown instead.