Home Finances All About Spend Downs, Part 2

All About Spend Downs, Part 2

Spend downs with Jim Koewler

What is a Medicaid spend down? Elder law attorney Jim Koewler joins Suzanne Newman to answer this question, and shows how it differs if you’re single or married.

In the previous segment, we talked about what to do if you’re married and you or a senior loved one needs care now — a crisis situation — and have some money available.

With a single person, if they want VA coverage, they have the same asset limits of $130K. If they want Medicaid long-term care coverage, they need to reduce assets to $2K, or their state’s level, which is very different from the VA level.

How you do that is through a spend down. A spend down is spending the excess money above your limit on anything that gives you roughly equal value. If you want to hide your assets, for example by buying your son’s junk car for $25,000, that is not considered a legitimate expense. Buying hearing aids, extra eyeglasses, dentures, those purchases are OK. Buying ten $1,000 TVs is acceptable as long as you don’t give them away. Pre-paying your funeral and your spouse’s funeral (you can’t over-pay), funeral services, is a great way to use extra money.

You may be required to private pay your care until spend down is finished, in some places, but check those details with a lawyer. Acceptability of donations varies by state, and sometimes even by case worker. Most cases involving church donations have been allowed, but donations have to follow your previous pattern of donations.