It is not unusual for individuals to apply for Medicaid and discover that they own too many assets to meet the requirements. Medicaid is a need-based government program, meaning that your assets have to be below a predetermined limit in order for you to be eligible to receive benefits.
The Federal Government sets the asset limits for Medicaid eligibility. Depending on your income and the value of your assets, you may be required to "spend down" a good portion of your assets before you are eligible for Medicaid. However, you must be very careful when doing so or you may become ineligible for Medicaid benefits for an extended length of time.
Spending down your assets simply means reducing the amount of assets you own in order to qualify for Medicaid. One of the biggest misconceptions people have is that you have to go broke in order to qualify for Medicaid. But this is simply not true.
There are many ways to qualify for Medicaid benefits quickly, while legally sheltering your assets from Medicaid spend down. This is perfectly legal and does not involve hiding anything from the Medicaid agency.
Proper Medicaid planning must be done lawfully and with consideration for both federal and state-specific Medicaid rules. So, while federal guidelines may say one thing, it is very important to know what your state has put in place in reference to those federal Medicaid rules.
Not all assets count when determining eligibility for Medicaid benefits. Many assets are considered non-countable for the purpose of determining Medicaid eligibility, including:
There are also other types of assets that may be considered non-countable. However, these determinations will need to be made on a case-by-case basis and in accordance with the Medicaid rules for the state in which you reside.
The following is a list of some of the strategies available to you to shelter your assets from Medicaid spend down. However, your unique situation should always be reviewed by a qualified Medicaid planning attorney to determine the best path to take.
Some payments for permissible expenses and purchases of non-countable assets can be made to reduce the value of your assets to qualify for Medicaid, for example:
Investing a significant amount of money in an annuity for your spouse, that guarantees a specified amount of income for a specific length of time, is an excellent approach to spending down assets for married couples.
This is because your spouse's income will not be counted against you when determining your eligibility for Medicaid. However, the annuity you invest in has to be transferable and your state's Medicaid agency needs to be the primary beneficiary after your spouse passes away.
Many states permit Medicaid applicants to pay for caregiver services, especially when those services will enable the applicant to stay at home rather than in a more costly nursing home. This might also be applicable even if the caregiver is an immediate family member. It should be noted, however, prepayment for these services is not permitted.
Proper Medicaid planning doesn't have to be confusing and difficult. If you know the rules, apply the appropriate strategies, and try to plan in advance of any sickness or disability, you can qualify for Medicaid and without having to spend down all of your hard earned assets. To find out more about Medicaid asset spend down, contact a knowledgeable and experienced Medicaid planning attorney for a free consultation.