What is Medicaid spend down?

Many individuals who apply for Medicaid find that they possess too many assets to qualify.  Medicaid is a “needs-based” program, and a successful Medicaid applicant must have insufficient assets to pay for one’s own long term care. Federal law establishes a benchmark for the amount of resources an individual may own to qualify for the program.

Medicaid spend down is the process of reducing an applicant’s (or a couple’s) countable assets to the level at which the applicant will be asset-eligible to receive Medicaid benefits. One misconception is that the only way to reduce the value of one’s assets is to spend them on the Medicaid applicant’s medical care. In reality, there are a wide range of expenditures that will reduce the value of the applicant’s estate that will enable Medicaid eligibility.

Some of these expenditures that can be made as part of a medicaid spend down include: paying legitimate debt such as a mortgage, an auto loan or a credit card; prepaying for one’s funeral; purchasing a burial plot for yourself, your spouse, your children; purchasing non countable assets; A Medicaid applicant can also make any needed payments to maintain or improve a non-countable asset, an example would be repairing or replacing the roof of one’s home, installing a wheelchair ramp or buying a new appliance such as a refrigerator; it is also possible in some circumstances to purchase an immediate annuity for the benefit of the spouse if married. 

Successfully completing a medicaid spend down in compliance with the medicaid rules is a complex process.  SSR Law office has successfully instructed a countless number of families on spending their assets in order to gain medicaid eligibility and strongly encourage you to meet with one of our skilled elder law attorneys to guarantee you do not run afoul of the rules.