Spending Down

In order to meet Medicaid requirements you must “spend down” or dispose of money and assets that exceed the Medicaid income limit. This isn’t as easy as transferring money into the account of someone else or changing over the deed to a house and a title to a car to a different name. The government has the right to look at the past 5 years of money transactions for this reason. There are many ways of doing this legally though.

Medical bills that have built up can be used in spending down. These bills must be bills for medical services or items for you, and your spouse if your spouse’s income is counted that will not be paid by another insurance plan or program. However, there are limits on using bills you received before you applied for Medicaid. These medical bills include doctor, hospital and prescription bills. Also, these include medical items and supplies such as gauze, gloves, bandages, and adhesives, over the counter drugs and vitamins prescribed by your doctor; and health insurance premiums, co-payments and deductibles.

Another way to “spend down” to meet the requirements is to make funeral purchases. Any resource that may be designated for burial is excluded in having to spend down. Up to $10,000 of a burial fund is excluded from countable resources. A paid-in-full burial sight, including a single burial plot, gravesite, crypt, mausoleum, casket, urn, niche, or other container used to hold the body of the deceased will also not be counted in the total assets in spending down. Also, any vaults, headstone, markers, and the opening and closing of the gravesite will not be courted either. As long as these things are paid-in-full they will not be counted. Anything one is paying on in installments is not excluded. An itemized life insurance policy it treated like a burial contract and is excluded from resources as well.