Many families ask about long term care affordability and if they are eligible for Medicaid. This article, written by Janice Wallace on http://www.Understanding-dementia.com briefly explains the “spend down” issue ; further questions are best answered by a Medicaid specialist or Elder Law Attorney.
Medicaid spend down may be a term that you have heard when discussing long term care planning for your family member. It means using your family member’s assets to pay for his care until he reaches the asset levels where he qualifies for Medicaid.
The Medicaid program is intended to serve people who meet tough low asset, low income guidelines. Individuals whose monthly income exceeds the low income guidelines must pay a sort of co-payment for services called share of costs.
The income and asset guidelines can change each year. The information provided on this page is current as of 2008.
The government designates two classes of assets when evaluating whether a person qualifies for Medicaid. Countable assets are assets that must be used for the person’s care prior to the person being placed on Medicaid. Exempt assets are exempt from being used for the person’s care but may be subject to recovery after the person’s death.
The asset guidelines for a single person are countable assets of $2000 in cash and investments and her home if she lives in it or plans to return to it.
A single person who lives in a nursing home retains $35 per month of her income for personal use with the rest of her income being applied to the cost of her care.
The countable asset and income guidelines are different for an individual who is married. Well spouses who live at home can retain the family home, a car, personal property and approximately $100,000 (the amount varies by state) in cash and investments plus a portion of the couple’s monthly income.
Before applying for Medicaid, a private Medicaid specialist can help you convert countable assets to exempt assets and take steps to protect assets from recovery.
In February 2006, the federal government tightened the rules of the Medicaid spend down process. The guidelines are intended to prevent people from moving assets from the ownership of the elder or disabled person to speed up the person receiving Medicaid benefits.
One key feature of the new law extended the amount of time to five years when the government will look back at financial transactions conducted in the past for transactions that do not meet the Medicaid guidelines.
There are still strategies that can help preserve part of a person’s assets. The best person to help you understand those strategies are Medicaid specialists.
Improperly following the spend down guidelines can result in your family member’s application for Medicaid benefits being deferred which means that he will not receive benefits right away.