If your countable income is more than the set limit for your household size, Utah Medicaid allows you to spend down to the income limit to be eligible for Medicaid. They talked to friends, social workers, and the visiting nurse. There are other ways of prepaying burial expenses. As previously noted, in order for applicants to be eligible for Medicaid, they must have limited income. One can make home reparations and modifications to improve access and safety, as well as build on to their existing home, such as adding a first floor bedroom or bathroom. In this case, you're eligible for Medicaid because you're considered "medically needy." Put differently, together a couple can often keep up to $4,000 in assets. Its coverage for 72.4 million Americans makes it the largest source of health coverage in the United States. Because the spouse is allowed a higher amount of income than the person applying for Medicaid, transferring money to an annuity and having it pay to the spouse is an acceptable spend-down strategy as long as it pays out before the … Ask for all costs paid in the three calendar months before the month you are applying for Medicaid. My friend and her family panicked. 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. Do You Know Which Type of Life Insurance Is Right for You? Not all states have a medically needy pathway. (Further detail is below under Countable Assets and Non-Countable Assets). When determining if one is over the asset limit, it’s critical to know which assets are counted and which are not. However, being over the asset limit does not mean one cannot qualify for Medicaid benefits. Countable assets are anything Medicaid counts toward the countable asset limit set by your state. Unlike a premium the Spend Down can be met in different ways: Making a monthly payment to the MO HealthNet Division Applying incurred medical expenses If the Spend Down is not met for a month the consumer's MO HealthNet for Disabled case will remain open … In the case of one spouse applying for nursing home Medicaid or long-term care via a HCBS (Home and Community Based Services) Medicaid waiver, the applicant spouse is generally able to retain up to $2,000 in assets. Once paid, your Medicaid is activated for this period. Medicaid is a needs-based health insurance program that exists to help people with healthcare needs who can’t otherwise afford healthcare coverage. medical bills. To qualify for Medicaid, often individuals must first complete an income or asset spend down. If they could, should they? Countable (non-exempt) assets are counted towards the asset limit. For many applicants, a Medicaid “Spend Down” is necessary so that the applicant will qualify for benefits. Medicaid is the nation’s health insurance program where most people will qualify based on work history. How to Qualify for Medicaid if You Have Assets The income and asset restrictions for Medicaid are s. Unfortunately, if your asset value exceeds $2,000 or your income level exceeds the state limit, your application will be denied. A Medicaid spend down is reducing the available assets by purchasing things that benefit the Medicaid applicant and his/her spouse. Not all assets held by the applicant are counted towards Medicaid’s asset limit. This site is for information purposes; it is not a substitute for professional legal advice. When considering the gray line between exempt and non-exempt assets and the complicated rules governing single applicants versus married applicants, it can be difficult to determine if one is over the Medicaid asset limit, and if so, by how much. Could they enforce the verbal Medicaid spend down agreement with the provider? As of 2020, the equity value cannot exceed $595,000, or $893,000, depending on the state in which one resides. However, there is no equity value limit if a Medicaid applicant’s spouse lives in the home. You can pay off credit cards, mortgage loans and automobile loans in full or just partially. One can pay off accrued debt, such as personal and vehicle loans, mortgages and credit card balances. These states are called income cap states, and in these states, Medicaid applicants can still become income eligible via Qualified Income Trusts (QITs). The perfect way to spend down assets is to pay down debt. Not all assets are created equal. Medicaid law allows some people with very limited income to be on Medicaid for free. Countable assets include: Non-countable assets are anything that is exempt from your Medicaid asset limit. 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. 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. That said, there are a few exceptions, such as Illinois, which only allows a community spouse to keep up to $109,560 in assets, and South Carolina, which allows the community spouse to keep assets up to $66,480. Any medical expenses—such as prescriptions, insurance premiums, doctor visits, and outstanding medical bills—that you incur are subtracted from your income. To get a statement of costs, call EPIC 1-800-332-3742 or ADAP 1-800-542-2437. 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. This program allows individuals to pre-pay their spend-down to Medicaid for a period of One to Six months. 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. 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. In general, any spending is fine, so long as one’s assets are not given away or sold for significantly less than they are worth. Ironically, now might be the time to go for it. One easy method is to use our Medicaid Spend Down Calculator. (For the elderly, this program is often called Aged, Blind and Disabled Medicaid). Maybe you need a wheelchair ramp, stairlift, or other accommodations for yourself or somebody who has a medical condition. Best Health Insurance Options for Single Parents, Learn the Notable Differences Between a Will and a Trust. However, being over the asset limit does not mean one cannot qualify for Medicaid benefits. To qualify for Medicaid, the person agrees to “spend down” his or her monthly income to the Medicaid income standard. If an applicant is over the asset limit for Medicaid eligibility, spending down excess non-exempt assets becomes paramount. The person may choose to either pay “excess” monthly income to the state or to pay a medical provider for one or more medical bills. By using our website, you agree to our terms of use and privacy policy. Countable assets include cash, bank accounts (checking, money market, savings), vacation houses and property other than one’s primary residence, 401K’s and IRA’s that are not in payout status (depending on the state in which one resides, this isn’t always the case), mutual funds, stocks, bonds, and certificates of deposit. (Further detail is below under Countable Assets and Non-Countable Assets). A Medicaid spenddown can literally refer to spending one’s money to get below $2,000.00. In most cases, married couples (with both spouses as applicants) are able to retain up to $3,000 of their combined countable assets. Medicaid has a look-back period in which all past transfers are reviewed. Jewelry, engagement or wedding rings, and family heirlooms. Look for a single premium immediate annuity because the money is paid as a single lump sum with payouts beginning immediately. 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. Use of this content by websites or commercial organizations without written permission is prohibited. Depending on the state in which one resides, “medically needy” may be called something different. In this case, the couple is generally limited to $3,000 total in assets. One can purchase medical devices that are not covered by insurance, like dentures, eyeglasses, and hearing aids. If one has gifted assets or sold them under fair market value during this timeframe, a period of Medicaid ineligibility will ensue. Spend down is the process of divesting an individual’s assets down to the amount that makes him or her eligible for Medicaid coverage for long term care. I was recently approached by a potential client who was a medicaid recipient and had $1,000 to her name - but was about to receive $5,000.00 from a personal injury settlement. The CSRA is further complicated by the fact that some states are 50% states, while others are 100% states. Retain an attorney: Paying legal fees is a strategic way to spend down because attorneys can advise … 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). If you’re above the limits, that doesn’t mean you don’t qualify—you might just have to spend down some of your assets each month. Often the money pays out to beneficiaries once the person passes away but it can also be paid to the original Trustor—generally not for at least five years after the trust is established. As with individual applicants, there are exceptions to this rule based on the state in which one resides. Gather all medical bills. In 100% states, the community spouse is able to retain 100% of the couples’ joint assets, up to the maximum allowable amount. Professional Medicaid planners are extremely instrumental in assisting one in the Medicaid application process, particularly if one is over the income and / or asset limit(s). There is also a home equity value limit for exemption purposes. You will automatically qualify for Extra Help the first month that you meet your Medicaid spend-down amount until the end of the calendar year (even if you do not meet your spend-down amount every period). Maybe you’ve always wanted a nicer car? An irrevocable trust allows your loved ones to receive the financial benefits of your assets. If the applicant’s income or countable assets exceed Medicaid’s financial limits in their state, it is possible to become eligible by “spending down” one’s income or assets to the point where they become financially eligible. Married Couples with One Applicant Medicaid spend down. At the time of this writing, in most states, the asset limit is $2,000. Even if you have too much income to qualify, some states let you "spend down" to become eligible for Medicaid. If one is over the asset limit after considering all non-cou… WHEN YOU SHOULD SPENDDOWN To decide if you should pay your spenddown, Home furnishings, appliances, other personal items. Once Medicaid applicants have spent their excess income (the amount over the income limit) on medical expenses, they will be Medicaid eligible for the remainder of the “spend down” period, which is between 1 and 6 months. Remember, you’re allowed up to $1,500 in the cash value of your life insurance policies. Some states allow “intent” to return home to qualify the home as an exempt asset. For example, the above $3,000 asset limit is common when both spouses apply for their state’s regular Medicaid program. Usually the spend down period lasts six months, although it can vary depending on the state. (As mentioned above, this figure, as of 2020, is $128,640 in most states). The non-applicant spouse, commonly called the community spouse, is able to retain a higher number of the couples’ combined assets. Married Couples Also, as previously discussed, an applicant must have assets, also called resources, under a certain amount to qualify for Medicaid. Income and asset limits for Medicaid do not remain consistent across the United States, nor do they remain the same even within each state. Non-Countable (exempt) assets are not counted towards Medicaid’s asset limit. Spend down usually occurs as the individual pays for nursing home care expenses out of pocket … 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. Note: You may qualify under Medicaid “spend down” rules (described later in this brochure) even if your income is more than Medicaid income levels in your state. When one is over the Medicaid asset limit, it becomes imperative to spend down excess, non-exempt assets in order to qualify for Medicaid. If she incurs medical bills of $50 per month, the rest of her medical bills will be covered by Medicaid. The limits often vary based on the specific Medicaid program and on one’s marital status. Assets held in irrevocable trusts or Asset Protections trusts are not counted towards the asset limit. Regardless of name, these programs allow applicants to spend excess income on medical bills and expenses, such as past due medical charges, prescription medications, health insurance premiums, and doctors’ appointments. The "spend down" process lets you subtract your medical expenses from your income to become eligible for Medicaid. Asset spend down can be complicated, and if not carefully done, can result in Medicaid ineligibility. Click here for assistance in finding a Medicaid planner. Here are a few ideas: Studies show that seniors are going into retirement with more debt than in the past. When a person’s assets exceed the strict limits set by Medicaid, one solution is a Medicaid spend down.. “Spend down” simply means reducing what are known as “countable resources” to the amount the person needing care is allowed to keep. 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. 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. Vehicle repairs, such as replacing the battery, getting an engine tune-up, or replacing old tires are also a way to spend down assets, as is selling an existing car at fair market value and purchasing a new one. Other exempt assets include pre-paid burial and funeral expenses, an automobile, term life insurance, life insurance policies with a cash value no greater than $1,500 (this limit can be the combined face value of multiple small life insurance policies), household furnishings / appliances, and personal items, such as clothing and engagement / wedding rings. Process : In order to participate in this Program, the Medicaid recipient must mail a check or money order equal to the surplus amount to the Division of Accounts Receivable and Billing (DARB), not the local This option may make sense for you if you have a low spend-down, so that you can afford to pay 3 … As mentioned above, being over the limit(s) does not mean one cannot become Medicaid eligible. You can spend down your own money to become Medicaid eligible. Hearing aids, dentures, eyeglasses, contacts, prosthetic devices, and surgical supplies also count as long as they’re not covered by insurance. Trusts require an estate attorney. To qualify for Medicaid you have to be at or below a certain income level and can’t have assets below a certain monetary value. Primary home—check with your state on rules regarding your home. One can create a formal life care agreement, often referred to as. A third party, called a trustee, controls the QIT. Medicaid has rules as to how many resources the applicant and the applicant’s spouse may keep. The 6 Best No Medical Exam Life Insurance Providers of 2020, 6 Steps You Should Take to Prepare for Retirement, Programs That Can Help With Your Medicare Premiums, How to Reduce Estate Taxes with an Irrevocable Life Insurance Trust, The 7 Best Burial Insurance Options of 2020. To begin, Medicaid has an asset limit, which must be met in order for an applicant to qualify for benefits. Provide any unpaid or paid medical bills. The spend down in this case is the $50 of medical bills she incurs. Rhode Island couples applying for regular Medicaid can retain up to $6,000 in assets and up to $8,000 in assets if they are applying for nursing home Medicaid or a HCBS Medicaid Waiver. You may have to pay a small part of your health care costs (like a … In many states, this option is known as the “Medically Needy Pathway”. 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. Copyright © 2020 All rights reserved. However, one must know the allowable Medicaid spend down items and they must proceed with caution in order to avoid violating Medicaid’s look-back period, which is 60-months in every state but California. There is also a minimum resource allowance, which as of 2020, is $25,728. Asset spend down is applicable across the 50 states, while income spend down is only relevant in some of the states. Which of Your Assets Are Subject to Probate? Furthering the complexity is the fact that asset limits vary based on the state in which one resides. (Medicaid reimbursement is much lower than private pay open market rates). Full or partial payments. Pay-In Program. That means some of the individual's income or assets … Anybody who owns a home knows that it’s easy to spend a lot of money fast. 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. (California has a 30-month look-back period as does New York for certain types of Medicaid). (Again, this figure, as of 2020, is $128,640 in most states). A Medicaid spend down is a portion of health coverage that an individual must pay for before Medicaid coverage begins. In general, here are some of the ways you can spend down assets: Pay off debts – including mortgages, car loans, personal loans, and credit card balances. They started searching online about what to do. 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). Many experts advise against this type of arrangement. The exact amount of the spend down varies depending on the state in which you live, medical bills you have each month and other factors. However, there are many Medicaid spend down rules about how one can legally spend down their financial resources such as rules against gifting, and if these rules are violated, the applicant will be denied Medicaid. Essentially, you can use… 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. If there are excess resources, the applicant must spend down to the applicable resource limit. It is fairly standard that a single elderly applicant is limited to $2,000 in countable assets, but again, this figure varies based on the state in which one resides. Asset spend down can be complicated, and if not carefully done, can result in Medica id ineligibility. The costs paid by EPIC or ADAP, not just your co-payment, count toward your excess income. He is now the president of IT services company "The Web Group. You’re allowed one vehicle so put some money into repair or upgrades. Life insurance policy with a cash value of $1,500 or less. What Is an Irrevocable Life Insurance Trust? Your only option is to spend down your assets and manipulate your income (lawfully) until you qualify. An applicant must have assets, also called resources, under a certain amount to qualify for Medicaid. Bank accounts—checking or savings accounts. When considering one’s assets, it’s important to be aware that some assets are exempt, or said another way, not counted towards the asset limit. However, one fact remains the same: all Medicaid programs for the elderly require either restricted income or assets or both. An irrevocable medical trust is money set aside that becomes part of the trust that pays out to certain beneficiaries. 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. See more here: This also applies to bank loans or other loans the applicant or spouse is legally obligated to pay. You might hear of Irrevocable funeral trusts, which establish a trust for burial expenses with the funeral home named as the beneficiary. What you pay for coverage depends on your state’s rules. Keep in mind that each state has different rules regarding who is eligible for Medicaid and how the qualification process is administered. Medicaid spend down. Other exceptions exist. That’s when the trust becomes an attractive option. Fortunately, there are many ways for one to spend down assets without violating the look-back rule, and hence, avoid being penalized with a period of Medicaid ineligibility. Medicare will pay first for covered medical services, and Medicaid will pay second for qualifying costs, such as Medicare cost-sharing. Doing this might be the single best strategy for killing two birds with one financial stone. This money is permanently placed in the trust and managed by somebody other than the person or their spouse. 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. To be eligible for Medicaid long-term care (at home or in a nursing home), an applicant must have income and assets under a specified amount. The person has a choice of how to pay the amount above the Medicaid income limit. What do I pay? Even the wealthiest Americans qualify. When you start or change automatic withdrawal, please … Strategies to Spend Down Assets to Gain Medicaid Approval. Because the spouse is allowed a higher amount of income than the person applying for Medicaid, transferring money to an annuity and having it pay to the spouse is an acceptable spend-down strategy as long as it pays out before the end of the community spouse’s life expectancy. If the individual can show they pay $50 per month on medical expenses, they can deduct $50 from their income and qualify for Medicaid. This is called a spend down. When considering ones assets, its important to be aware that some assets are exempt, or said another way, not counted towards the asset limit. 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