Watch Your Language: Spenddown

Orange City Iowa Estate Planning

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A Medicaid spenddown can mean two different things - and neither is what you'd expect.

When a Medicaid applicant is married, the rules allow their spouse to retain a minimum amount of assets and income. We've already talked about the community spouse resource allowance (CSRA); the minimum income level is called the minimum monthly maintenance needs allowance (MMMNA). [Read More]

When nursing home social workers and billing departments refer to “spenddown”, they really mean “spenddown amount.” In that context, spenddown means the extra countable resources owned by or attributed to the Medicaid applicant.  It is the amount an applicant needs to spend.

For Medicaid eligibility purposes, the spenddown is the process a Medicaid applicant goes through to reduce their countable assets to the level needed to be eligible for Medicaid benefits.  In Iowa in 2020, a single nursing home resident applying for Medicaid may only have $2,000 worth in resources.  For a married couple, that amount increases to $3,000.

The nursing home makes that seem pretty simple: if you have too much money, spend it on your nursing home bills until you’re eligible for Medicaid. But, fortunately for most people, “spenddown” doesn’t have to mean all the assets get spent – at the nursing home or anywhere else.

For Medicaid planners, spenddown is the process of taking countable resources and turning them into non-countable resources. It’s using careful timing and the tools available to save our clients’ money. It’s leveraging the restrictions imposed by the Department of Human Services to achieve your goals.

Neither the nursing home nor the Deparment of Human Services can help you plan an efficient spenddown. To learn how spending can really mean saving money for your spouse and children, call us at (712) 737-3885.

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