Medicaid Spend Down

If you are interested in obtaining long-term care benefits to pay for nursing home or in-home care for yourself or a loved one, you’ve probably heard about the “Medicaid spend down.” The term refers to spending down assets to meet the low threshold for Medicaid eligibility. You can have no more than $2,000 in countable assets if you want to receive benefits.

Nursing home costs are so high that most people cannot afford care for long without some assistance. They generally expect to pay the nursing home until they are out of money, and then they will apply for long-term care benefits through Medicaid.

However, there are ways to accomplish spend down goals without depleting all resources toward care costs. You need to follow strict rules to avoid penalties, which is why it is very helpful to consult an experienced attorney for assistance with the spend down process. Huizenga Law helps families with strategies that meet requirements while conserving assets.

What Not to Do During a Medicaid Spend Down

If you’re a generous person, the most natural step in the world would be to give away your assets so you can qualify for Medicaid. You would just be handing your children and grandchildren their inheritances a little early.

Unfortunately, money you have given away during the previous five years is almost counted as if you still owned it. Medicaid “looks back” for five years to see what you’ve done with your property. If you transferred it to a trust, gave it away, or even sold it at a rate the government considers to be below market value, then that property triggers a penalty that delays your eligibility for benefits.

Even some legitimate care costs, such as paying a friend or family member for care services, can be treated as a gift and trigger a penalty if you don’t have the proper records. It is important to be very careful during a Medicaid spend down.

Planning Ahead is Best

If you can divest assets before you need care, you put yourself in the best position to conserve assets. You have many options available if you start planning at least five years before you need nursing home care so you don’t need to worry about triggering lookback penalties. For instance, you can transfer assets to a trust, re-title property, support family members, and take other steps to reduce countable assets without unnecessarily depleting those assets.

In a Crisis Situation

Many times, an accident or sudden illness forces the need for nursing home care without warning. When this happens, there are still strategies to spend down countable assets without triggering penalties.

For instance, paying off debts, upgrading a vehicle, and making improvements to the home can provide ways to spend down assets significantly while still retaining value. But you must take care to follow the rules with each expense, so legal guidance can be very helpful throughout the process.

Huizenga Law Can Help Manage the Medicaid Spend Down

A Medicaid spend down can be a painful agonizing hemorrhage of funds or it can be a strategic and thoughtful process designed to preserve assets for your family and future needs. Advice from the team at Huizenga Law can help keep you in control during a spend down and keep your family in the best position to face whatever lies ahead. Contact us today to schedule a consultation and learn more about how we can help.