Home Finances All About Spend Downs, Part 1

All About Spend Downs, Part 1

Spend Downs with Jim Koewler

What do you do when you or a senior loved one needs care now — a crisis situation — and they have some money available? Elder law attorney Jim Koewler joins Suzanne Newman to answer this question. In this situation, one option is to choose to private pay for the care. This segment focuses on financial eligibility for married couples to receive VA pension benefits and Medicaid. More providers don’t want to participate in Medicaid’s reimbursement because it doesn’t pay as much as private pay, though this could change in the face of COVID.

If you’re married, to get Medicaid you have to spend your assets down below $2,000 (Federal and Ohio levels; amounts vary by state). If you have more than $260K, the healthy spouse would be able to keep about $130K. The rest of it is attributed to the one who needs care and must be spent down. The VA has roughly similar levels whether you’re single or married, but there is no 50/50 split between spouses. VA penalizes money given away in the last 3 years; Medicaid for the last 5 years. There are differing effects on property ownership, depending on your state. What you can do with your wealth differs with VA pension benefits and Medicaid, but you can still spend. Spending is OK — you can’t give away without the potential penalties, and the penalties are treated differently in the two programs as well. If you want to spend on things that make sense, for instance on a lift chair, or comfortable clothes that are easy to take on and off, or hearing aids, dentures, glasses, or four cruises around the world, that’s OK.