Ready to Be On Medicaid* in
How Should You "SPEND DOWN"?
Advice - Consult Your Own Attorney)
Lisa Nachmias Davis
Davis O'Sullivan & Priest LLC - Attorneys at Law
1. First, what does it MEAN to “spend down” assets?
To qualify for Title 19 (Medicaid) for LONG-TERM CARE* (other programs differ) you can ONLY have:
If unmarried: $1,600 plus certain “Exempt Assets” (see my
• If married with spouse living at home: $1,600 plus UP TO $117,240 for your spouse, total maximum $118,840. (Usually, spouse gets only 1/2 of COMBINED assets or 117,240 whichever is less -- but this can vary and go up -- consult an elder law attorney..)
you have more
than this, you do not qualify (possible exception:
if you are married and your combined income
is under $2,931; RARELY if you are married and income is more --
consult an attorney first). The
Department of Social Services, which
administers Medicaid in
Suppose you have not $1,600, but $51,600. You have $50,000 too much. You have to “spend down” to $1,600 before you will be eligible. YOU HAVE TO BE "SPENT DOWN" BY MONTH'S END TO BE ELIGIBLE FOR THAT MONTH. "Spent" means the money is GONE -- the State doesn't care if you owe debts -- the State isn't interested in your "net worth." Note: a check that hasn't cleared is not GONE! And don't forget -- the cash value of LIFE INSURANCE is an ASSET -- you may have to cash it in and get it spent by month's end!
2. How should you “Spend Down” assets if you are NOT married?
MEDICARE SUPPLEMENTAL INSURANCE may still be purchased and cover you even if you are in a nursing home. This can be vital to cover the co-pays for days 21 - 100 of the nursing home stay which might be $10,000+ otherwise. CAUTION: TALK TO A LAWYER FIRST if you made a "gift" within the past 5 years. Note: you may not need this if you have "low" income and apply for a "Medicare Savings Plan."
FUNERAL ARRANGEMENTS: $5,400 maximum for an irrevocable funeral contract, no limit on a "burial trust" for casket, grave lining, etc. One cemetery plot (one for each, if married).
GET YOUR TEETH CHECKED. The Title 19 program can have terrible dental coverage, especially for nursing home residents, and few dentists are willing to participate. The State will pull your teeth for you, but that’s about it. Also, dentures can get stolen in the nursing home. NOW IS THE TIME to have your teeth checked thoroughly, all dental work completed and all fixtures bought. If you are in a nursing home, ask whether you can be transported to a dentist outside. If the work won't be done before you have "spent down," arrange to pay the bill up front.
GET YOUR EYES CHECKED. The Title 19 program is not much on eyes either. NOW IS THE TIME to buy spare pairs of glasses, or if you prefer, contact lenses and all the fixtures. Glasses also can get stolen in the nursing home!
CHECK YOUR FEET, SKIN, EARS.... Title 19 covers the basics. You do NOT have your choice of doctor and you do not get everything done that can be done. The State may only pay for a crummy $400 hearing aid. NOW IS THE TIME to attend to any problems that the State may not find important, especially getting the best hearing aid/wheel chair/voice adapter/ventilator money can buy. Ad... hearing aids get stolen in the nursing home!
GET YOUR AFFAIRS IN ORDER. Whether or not you will really need a will, you should have a General Durable Power of Attorney, and if it does not include health care provisions, then also a Designation of Health Care Representative. It is a good idea to appoint a Conservator in case one is required. Finally, many people want Living Wills that authorize life support to be withheld or withdrawn if you are terminal or in a "persistent vegetative state." You MAY add more specific instructions, too. All health matters can be combined in one document. Check my article, "What You Owe Your Family."
MAKE ANY EXEMPT TRANSFERS. While many gifts can cause problems for Medicaid eligibility, some do not. These include (if NO STRINGS ATTACHED):
• Transfer of your home, or anything else, to a child receiving Social Security Disability or SSI benefits. Consult an elder law attorney or other knowledgeable attorney if you plan to transfer anything to a disabled person who gets benefits.
• Transfer of your home to a sibling who lived with you for the prior year and who owns an interest in your home (name is on the deed).
• Transfer of your home in certain other situations to a child who cared for you for 2 years and lived with you. Consult an elder law attorney on how to document this for the State.
• SOMETIMES: transfer of money to anyone who lived with / cared for you for 2 years - consult an attorney!!
• If you are under 65: Transfer to a "special needs trust" or "pooled trust account" for your own benefit! Consult an elder law attorney. If you are over 65, this option may not be available -- but it depends -- consult an elder law attorney.
or gifts can cause BIG
PROBLEMS if you don't follow the rules EXACTLY.
OTHER EXEMPT TRANFERS EXIST, TOO. CONSULT AN ELDER LAW ATTORNEY.
SHOP 'TIL YOU DROP or ask someone else to help you! BUY whatever will make your stay more comfortable. ONCE YOU ARE ON MEDICAID, YOU HAVE TO MAKE DO ON $60/MONTH. Buy a new TV/VCR/DVD, a portable tape or CD player, a laptop computer, pre-paid Cable or internet service, magazine and newspaper subscriptions, a new bed-jacket, your favorite toothpaste, bedroom slippers.....
PAY IN ADVANCE FOR HELP WITH THE MEDICAID APPLICATION. If your financial affairs and plans are very simple, you may not need help. In that case, a friend or family member, or you, can complete the paperwork and deal with the State's questions. If you, your family or friends are not "paper people" and might have trouble, or can't be relied upon to respond quickly to the State's follow-up questions, or if you are married, OR IF YOU HAVE MADE ANY TRANSFERS, consult an elder law attorney. This may, or may not, be a disaster -- you will need help. IT IS BETTER TO PAY FOR THIS UP-FRONT WITH YOUR OWN MONEY, THAN FOR YOUR FAMILY TO PAY LATER WITH THEIR MONEY. Be sure to consult only someone who is knowledgeable about Medicaid in your state.
PAY IN ADVANCE FOR "PERSONAL SERVICES." If you do not have close family you can rely upon, you may want to set up a contract with a friend or care provider who can attend care conferences about you, run errands for you, visit you regularly, etc. Consult an attorney and don't try this at home.
MAYBE A POOLED TRUST ACCOUNT? There may be a way to set aside a little fund for extra needs -- the State will get it when you pass away. Consult an attorney, don't try this at home. Much more likely to work if you are getting long-term care services at home.
3. How should you “Spend Down” assets if you ARE married?
In addition to the ways described above, you can:
FIRST, SEE A
LAWYER ABOUT HELPING YOUR
BEFORE SPENDING ANYTHING. I am not
trying to be self-serving by saying that it is VITAL that you consult
law attorney. The State of
PUT THE MONEY IN THE FAMILY HOME. Your home is an exempt asset as long as your husband or wife (or minor or disabled child) is living there. Pay off the mortgage (unless you are trying to protect funds for your spouse, in which case check with your lawyer). Install the vinyl siding; get a new roof and furnace; buy the replacement windows; add a new carpet; put in the new kitchen your wife always wanted. She can always borrow against the house later, or even sell it.
PUT THE MONEY IN THE FAMILY CAR. If you are married, you may want to spend the money by investing in your car, which is an exempt asset. Trade in that 1990 Chevvy for a 2014 Prius!
DON'T FORGET TO PAY APPLIED INCOME -- unless you have a spouse in the community with low income, in most cases your income (minus Medical insurance premiums, minus $60) will have to be paid to the nursing home every month you are on Medicaid. DON'T FORGET or someone will have a nasty surprise months later when the bill comes in and/or can get sued by the nursing home. Read my article, "What You Still Have to Do"!
*Figures change annually. ALSO: Some programs do NOT have an assets test so NO spending down is at issue. At this time, the "low-income Medicaid" program in Connecticut (Husky D) has effectively no asset test so no spending down for that program.
USE AT YOUR OWN RISK. Please report changes, errors, and suggestions to Lisa Davis.
Lisa Nachmias Davis
Davis O'Sullivan & Priest LLC - Attorneys at Law