In this case, you're eligible for Medicaid because you're considered "medically needy." A Medicaid spenddown can literally refer to spending one’s money to get below $2,000.00. In this case, the couple is generally limited to $3,000 total in assets. Medicaid has rules as to how many resources the applicant and the applicant’s spouse may keep. If one has gifted assets or sold them under fair market value during this timeframe, a period of Medicaid ineligibility will ensue. One can purchase medical devices that are not covered by insurance, like dentures, eyeglasses, and hearing aids. What Is an Irrevocable Life Insurance Trust? If they could, should they? As previously noted, in order for applicants to be eligible for Medicaid, they must have limited income. Anything above that might make sense to cancel. While the “spend down program” can refer to both income and assets, it is much more common when discussing assets and the majority of this article will focus on that subject. Could they enforce the verbal Medicaid spend down agreement with the provider? Hearing aids, dentures, eyeglasses, contacts, prosthetic devices, and surgical supplies also count as long as they’re not covered by insurance. Understanding Exempt vs. Non-Exempt Assets, Determine Your Asset Limit and How Much Must be Spent Down, How to Spend Down Assets to Become Eligible, Seek Assistance from a Medicaid Planning Professional. For example, the above $3,000 asset limit is common when both spouses apply for their state’s regular Medicaid program. For couples who are applying for nursing home Medicaid or a HCBS Medicaid Waiver, states often consider each spouse as a single applicant, allowing each spouse $2,000 in assets, as Oklahoma does. Income and asset limits for Medicaid do not remain consistent across the United States, nor do they remain the same even within each state. As of 2020, the equity value cannot exceed $595,000, or $893,000, depending on the state in which one resides. Remember that your home is a non-countable asset so spending down by investing in your home is a great way to unload some money. Countable Assets Primary home—check with your state on rules regarding your home. To qualify for Medicaid, the person agrees to “spend down” his or her monthly income to the Medicaid income standard. Medicaid Spend-Down Explained. This means that if the combined assets of the couple are at or below $25,284, the community spouse is able to retain 100% of the assets up to this figure. Ironically, now might be the time to go for it. Retain an attorney: Paying legal fees is a strategic way to spend down because attorneys can advise … As of 2020, this figure, called the Community Spouse Resource Allowance (CSRA), can be as great as $128,640. Even if you have too much income to qualify, some states let you "spend down" to become eligible for Medicaid. Purchase an Annuity. To qualify for Medicaid, often individuals must first complete an income or asset spend down. Countable assets are anything Medicaid counts toward the countable asset limit set by your state. Or sell the old one and buy a new one. If one is over the asset limit after considering all non-cou… If the individual can show they pay $50 per month on medical expenses, they can deduct $50 from their income and qualify for Medicaid. Medicaid spend down. When you start or change automatic withdrawal, please … This site is for information purposes; it is not a substitute for professional legal advice. For example, John has an $800 Medicaid Spend-down, which means that John must cover the first $800 in eligible medical expenses and thereafter Medicaid will cover the remaining eligible medical expenses. Here’s a simplified scenario of an income spend-down: a person over 65 is denied Medicaid because their monthly Social Security check is $50 more than the state’s Medicaid income limit. If bills are unpaid, from a Medicaid provider, and the spend-down amount is met, then Medicaid will cover the amount over the spend-down. Countable (non-exempt) assets are counted towards the asset limit. (Medicaid reimbursement is much lower than private pay open market rates). Medicaid law allows some people with very limited income to be on Medicaid for free. bills more than the spend-down amount will be credited to the months of eligibility (remember the credit includes the portion of the paid bill above the spend-down). A Medicaid spend down is reducing the available assets by purchasing things that benefit the Medicaid applicant and his/her spouse. The costs paid by EPIC or ADAP, not just your co-payment, count toward your excess income. Provide any unpaid or paid medical bills. MedicaidPlanningAssistance.org is a free service provided by the American Council on Aging, What is the Medicaid Estate Recovery Program, Medicaid Spend Down Calculator is available here, consult with a Medicaid planning professional, Allowable Medicaid Spend Down Items (Updated Sep. 2020). By using our website, you agree to our terms of use and privacy policy. However, one fact remains the same: all Medicaid programs for the elderly require either restricted income or assets or both. Keep in mind that each state has different rules regarding who is eligible for Medicaid and how the qualification process is administered. As with individual applicants, there are exceptions to this rule based on the state in which one resides. You need to complete a Spend Down Automatic Withdrawal Form PDF Document. Best Health Insurance Options for Single Parents, Learn the Notable Differences Between a Will and a Trust. Asset spend down can be complicated, and if not carefully done, can result in Medica id ineligibility. North Dakota allows married couples to keep up to $6,000 in assets, regardless of if they are applying for regular Medicaid, nursing home Medicaid, or a HCBS Medicaid Waiver. These states are called income cap states, and in these states, Medicaid applicants can still become income eligible via Qualified Income Trusts (QITs). However, there is no equity value limit if a Medicaid applicant’s spouse lives in the home. Submit copies of your bills to your assigned caseworker. Even when only one spouse of a married couple is applying for Medicaid, the couple’s assets are considered jointly owned and counted towards the asset limit. Commonly called Miller Trusts, an applicant’s excess income is directly deposited into an irrevocable trust, which means it cannot be changed or dissolved. Home furnishings, appliances, other personal items. Some states allow “intent” to return home to qualify the home as an exempt asset. The money in the trust is exempt from Medicaid’s income limit, and it is only available for very limited purposes, such as paying for the senior applicant’s long-term care and medical related expenses. At the time of this writing, in most states, the asset limit is $2,000. (California has a 30-month look-back period as does New York for certain types of Medicaid). Another exception to the rule is California, which has no home equity value limit whatsoever (for certain types of Medicaid). This money is permanently placed in the trust and managed by somebody other than the person or their spouse. However, being over the asset limit does not mean one cannot qualify for Medicaid benefits. Individuals with a Medicaid Spend-down have a monthly deductible they must reach before Medicaid is activated. What you pay for coverage depends on your state’s rules. Remember, you’re allowed up to $1,500 in the cash value of your life insurance policies. For example, the program might be called any of the following: Share of Cost, Excess Income, Surplus Income, or simply, Spend Down. Not all states have a medically needy pathway. Its coverage for 72.4 million Americans makes it the largest source of health coverage in the United States. These thresholds vary widely from state to state but generally speaking, you can have no more than $2,000 in countable assets if you’re single and $3,000 if you’re married. In very simplified terms, in 50% states, the community spouse can keep up to 50% of the couple’s assets, up to the maximum allowable amount. The CSRA is further complicated by the fact that some states are 50% states, while others are 100% states. Also, as previously discussed, an applicant must have assets, also called resources, under a certain amount to qualify for Medicaid. If you can't, consider using a SUPPLEMENTAL NEEDS TRUST (SNT) TO ELIMINATE THE SPEND-DOWN - People who are "disabled" as defined for Social Security benefits -- whether under or over age 65 --may deposit their spend-down into an SNT, and request their local DSS to rebudget their income to disregard the deposited income - this eliminates the spend-down. You might hear of Irrevocable funeral trusts, which establish a trust for burial expenses with the funeral home named as the beneficiary. When considering ones assets, its important to be aware that some assets are exempt, or said another way, not counted towards the asset limit. Professional Medicaid planners are able to assist one in reallocating income and / or assets, maintaining maximum assets for healthy spouses, and “spending down” assets without violating Medicaid’s look-back period. There is also a minimum resource allowance, which as of 2020, is $25,728. Many people who I talk with don’t fully understand what it means when an applicant for Medicaid needs to spend down their assets so that they can qualify for benefits. As mentioned above, being over the limit(s) does not mean one cannot become Medicaid eligible. If one is over the asset limit after considering all non-countable assets, one will have to “spend down” assets in order to meet Medicaid’s asset limit. When you cancel the policy or decrease the policy, the money goes back to the policyholder putting you back to the problem of having to spend down the payout. When determining if one is over the asset limit, it’s critical to know which assets are counted and which are not. Or the roof needs replaced or the décor is looking a little dated. Bank accounts—checking or savings accounts. How to Protect Your Estate So It Goes to Your Family—Not to Taxes. This holds true if one is applying for in-home care, institutional Medicaid / nursing home care, or assisted living services under a Home and Community Based Services (HCBS) Medicaid Waiver. Not all assets held by the applicant are counted towards Medicaid’s asset limit. Once paid, your Medicaid is activated for this period. They talked to friends, social workers, and the visiting nurse. Trusts require an estate attorney. Medicare will pay first for covered medical services, and Medicaid will pay second for qualifying costs, such as Medicare cost-sharing.
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