Tools for a Medicaid Spend Down

How do I meet the financial requirements?

This is known as a “spend down” and will result in meeting the income and asset requirements to apply for Facility Medicaid.  There are several tools available to qualify for facility Medicaid that sets your family up for a better financial position rather than just spending all the income on long term care.  Below are just a few of the approved methods to complete a medicaid spend down to qualify for facility medicaid.

Home Repairs

If you own a home and intend to return to it, or have a spouse that will remain home, you can make repairs or modifications without penalty.  You could update a bathroom or kitchen, put on a new roof, build an addition, or make any repairs to improve a single house.

Bills (Current or Future)

In order to qualify for facility Medicaid you will never have more than $2000 or a monthly income.  Credit card bills, vehicle loans, mortgage payments, and any outstanding bills are eligible as part of a Medicaid spend down.  It is a good idea to get bills out of the way before moving on to other parts of the spend down.  In addition, if your loved one is only going to be in long term care for less than a year before returning home, you can go ahead and prepay mortgage and car payments so they don’t lose those while in long term care.

Irrevocable Funeral Trust

The average funeral and burial in Colorado costs $7000.  This is a cost that is often incurred on the children of the loved one that passess.  As part of a medicaid spend down, you can go ahead and cover this cost as a way to qualify for Facility Medicaid.  In addition, you can purchase a funeral trust for several family members if you have the assets to spend down.  The key here is the trust must be irrevocable, meaning non-refundable.

Miller Trust

A Miller Trust is a way to reduce the monthly income in order to qualify for Facility Medicaid.  If your loved one receives a pension or other monthly payment, this may be a necessary part of a spend down to qualify for Medicaid.  A Miller Trust will take the pension, and then provide a payout to a spouse or a small stipend to the Medicaid recipient.  If the monthly income is more than $2000 but less than the monthly cost of long term care you will want to contact an elder law attorney to set up a Miller Trust.

Buy a Vehicle

Everyone on medicaid is allowed one vehicle, no matter what.  Medicaid wants the client to be able to have someone drive them to appointments, reunions, and special events.  The car is a special exempt asset that you can transfer without penalty.  If you need to spend down $30,000 you could purchase a car and then transfer it to a son, daughter, or spouse.  Once medicaid qualification is made, the car could be sold and divided among the remaining family.
These are just a few of the big ways to spend down income and assets in order to qualify.  There are many other ways to accomplish the goal of qualifying financially, such as a spending spree on items for the person needing care.  You could buy an iPad, a scooter to get around, a recliner, and anything else to improve the quality of life while in Long Term Care.

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