In order to be eligible for Medicaid, seniors may need to “spend down” or deplete their assets and funds until they meet the required income requirement levels.
There are a few ways to spend down, but the most common is to use the money to pay for medical bills. Once those bills have been paid, the senior will then be eligible for Medicaid coverage.
Other ways to spend down include:
- Using the money to pay off debts
- Buying items that are exempt from the spend down requirements
- Donating money to a charity
It’s important to note that seniors should consult with an attorney or financial advisor before spending down their assets, as there are a few rules and exceptions that could impact their eligibility for Medicaid.
What Is Medicaid Spend Down?
Medicaid spend down is a process by which an individual can qualify for Medicaid coverage by reducing their assets to below a certain level. This is often done by using up funds on medical expenses or long-term care costs.
Individuals who have too much money in the bank or other assets may not qualify for Medicaid coverage unless they “spend down” those assets on medical bills or long-term care costs.
This process can be difficult to understand and even more difficult to navigate, but it is important to know if you or a loved one may need Medicaid coverage in the future.
Two Spend Down Programs
Asset Spend Down – This program is for people who have too many “countable assets.”
Income Spend Down – This program is for people who have too much “countable income.”
What Is A Countable Asset?
A countable asset is anything that you own and could use to pay for your medical care. Some examples of countable assets are:
- Your home
- A car
- Bank accounts
- Stocks and bonds
- Life insurance policies with a cash value
What Is A Countable Income?
A countable income is the money you receive from any source. Some examples of countable income are:
- Social Security benefits
- Unemployment compensation
- Child support
How Does The Asset Spend Down Work?
The asset spend down works by making you ineligible for Medicaid coverage until your countable assets are reduced to the Medicaid eligibility limit. For example, if you have $4,000 in countable assets, you would need to spend down $2,000 to meet the Medicaid eligibility limit.
Once you have met the asset spend down, you will need to submit proof of your expenditures to the Medicaid office. Once your expenditure documentation has been approved, you will be eligible for Medicaid coverage.
What Are Some Examples Of Approved Expenditures?
Some examples of approved expenditures include:
- Paying off debts
- Making home repairs
- Buying a car
- Paying for medical expenses
- Funeral expenses
What Are Some Examples Of Disapproved Expenditures?
Some examples of disapproved expenditures include:
- Buying non-essential items
- Taking lavish vacations
If you have any questions about what expenditures are considered eligible, you should contact your local Medicaid office.
Who Is Not Eligible For Medicaid Spend Down?
There are some people who are not eligible for Medicaid spend down, even if they have high medical bills. These people include:
- People who are already receiving Medicaid benefits
- People who are eligible for Medicare
If you are not sure whether or not you are eligible for Medicaid spend down, you should contact your local Medicaid office.