What is a "spend-down" for Medicaid? Do they make you spend all your money to be able to qualify?

I tried to figure out by reading the PA Medicaid handbook but it’s confusing. At first I thought it meant you have to spend all your money above the limit on medical bills somehow to qualify for Medicaid but it said paid medical bills count too.. well you can’t spend money that you already spent, so i must be misunderstanding some part of it. Can someone explain this to me? There’s also MPO and MNO spend down and I can’t find anything that explicitly explains the difference between those two. I was trying to read this part here but again I’m just not fully understanding it.

My situation is that my doctor has to fill out a form saying whether I’m disabled for more than 12 months and I am, which will put me into a non MAGI category(305.11 in the handbook), specifically I get put into the one for adults over 65 and adults with disabilities. Then the subgroup under that that I fall into is called “Healthy horizons”. However, there’s an asset limit and I go over the limit. So then they’re supposed to determine eligibility for two other subgroups, which require Medicare eligibility, which I do not have, because I don’t qualify for SSI or SSDI either due to assets limits. Then I think they sometimes consider a spend down. Not sure which they do first, try to put you on a spend down or consider the other two subgroups.

What I’m concerned about is whether I’ll be forced to spend it all (IRA and education fund that a deceased relative left for me) to qualify, or if they just put me back into MAGI (information here under 312.16) with the M90D code.

Wondering if anyone here knows better how to read this stuff maybe or knows what a spend down is and how they decide to put you on one?