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What is Medicaid Spend down?

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There is a misconception that you must be poor to qualify for Medicaid benefits should a loved one need to enter a nursing home. Medicaid is a state-run program for the individuals who need health insurance but have limited resources.  One of the most important aspect of the Medicaid program for elderly Americans is providing coverage for Skilled Nursing Home care. To qualify for Medicaid coverage for a Skilled Nursing Facility (SNF), a nursing home applicant must have assets no more than $5,301.85 and if married the non-applicant spouse cannot have assets over $137,400. So, if a couple has more resources than just mentioned, a “Medicaid spend down” must occur to qualify for Medicaid benefits.

Many people believe that they have to spend down every hard-earned dollar and lose the house to qualify for Medicaid; this is simply not true! There is a huge fear that the house will be taken away if one spouse enters a Nursing Home.  The state has an incentive to keep the healthy spouse financially secure.  The spouse can keep the house if it has an equity of no more than $636,000.

It is extremely important to consult a qualified Elder Law Attorney before spending down assets as there are ways the preserve the nest egg most elderly couples have worked so hard for. An Elder Law Attorney will take a financial picture of the elderly couple and split the assets in half.  If asset levels are above $5000 for a sick spouse and above $137,400 for healthy spouse, a spend down has to happen for an individual needing SNF to become eligible for Medicaid.

Assets are qualified into two categories – Countable and Noncountable. Noncountable assets are items that Medicaid does not consider or look at when determining Medicaid eligibility.  In other words, you can expend “your assets” on items that are deemed noncountable assets.

What are some examples of noncountable assets?

  1. Home (personal residence) – equity up to $636,000
  2. Irrevocable Funeral Trust (valued at $9,999 in Missouri)- can buy for both married couple and immediate family members.
  3. Vehicle-Medicaid applicants can keep one vehicle-can be of any value (you can purchase that dream car or a souped up car that can transport spouse in Nursing Home places)
  4. Personal items (furniture, clothing, etc…)
  5. Life Insurance face value of $1500.

Whatever is left over, after spending money on noncountable assets must be spent down to qualify for nursing home Medicaid benefits.  But wait a qualified elder law attorney can help you find ways to preserve most of the assets.  There are legal ways to save that hard earned money.  Consult an Elder Law Attorney today to find out how. Mid-America Law Practice, LLC serves Elder Law Clients in Missouri.  Call for a free consultation (314) 347-3567.

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