Spending Down is a common term you will hear if you are looking to get Medicaid coverage for nursing home care and it is possible to avoid having to do that. It’s not uncommon for individuals who apply for Medicaid to discover that they have too many assets to qualify for the program. Remember, Medicaid is a “needs-based” program, and eligibility is based on an applicant’s inability to pay for his or her own care.
Spending Down Further Explained
Federal law establishes a cut-off for the amount of resources an individual may own and still qualify for the program. Those with too much income or assets to qualify for Medicaid must get rid of their excess income. Spending down is the process of an applicant reducing the value of his or her assets to qualify for Medicaid.
Some people believe that there’s just one way to reduce the value of one’s assets… to spend them on the Medicaid applicant’s medical care. However, there are several expenditures that will reduce the value of the applicant’s estate that will enable Medicaid eligibility.
For many of the groups eligible for Medicaid, income eligibility is determined with regard to the Federal Poverty Level (which changes every year). If the household income of a person in Florida eligible for Medicaid is less than a certain percent of the Federal Poverty Level, he or she will meet the income requirements. These percentages vary based on family size and eligibility group, such as age or disability. Medicaid eligibility for Florida seniors is based on the Social Security Administration guidelines for recipients of supplemental security income (SSI). To be eligible for Medicaid, applicants must have no more than $2,000 in “countable” assets (the amount may vary by state).
There are some assets that don’t have to be spent or sold to qualify for Medicaid—these types of assets don’t need to be spent down.
Examples of some of the non-countable assets include prepaying funeral expenses, paying off a mortgage, home repairs, and paying for more care at home, as well as a limited amount of cash ($3,000 for a couple), when both are applying for Medicaid.
The determination of whether any of these assets are exempt, and to what extent, however, is made on an individual case basis. Florida’s Medicaid program will consider state laws and factors such as marital status and living arrangements.
If you have questions about Florida Medicaid, Attorney Frazier is a skilled Medicaid planning (with over 2,000 cases completed that helped preserve their family’s savings), estate planning and elder law practitioner. Please contact Attorney Frazier for a free telephone consultation at 727-586-3306 extension 104. If you prefer click here now to send in a contact form and we will call you.