Medicaid Spend-Down Checklist
There is a great deal of confusion regarding the spend-down of assets for Medicaid qualification.
For a single person, who can only keep $2,000 in countable assets in Hawaii, that individual may find him or herself wondering what the money can be spent on without causing any Medicaid disqualification.
Similarly, for a married couple, the rules are even more complex. In Hawaii, the community spouse, (i.e. the at- home spouse) may keep up to $92,760 in the year 2004 of the couple's assets. Depending upon their resources, the couple may have a substantial amount of money which needs to be spent before the nursing home spouse qualifies for Medicaid.
That is often where the confusion begins. That's because there is so much misinformation about what kinds of things the money can be spent for. For that reason, we have put together the following checklist to help people better understand the law… and where the money can legally be spent.
For someone who is pursuing Medicaid eligibility in Hawaii, following are the types of spend-down items, in no particular order, which should be considered:
- Purchase bone fide pre-paid funeral plans and burial plots.
- Purchase new cars. It is perfectly acceptable to purchase a new car.
- Payment of nursing home expenses. Of course, nursing home expenses and other healthcare costs can be made as part of a spend-down.
- Purchase of a new home. Since the home is an exempt asset, in some instances purchase of a new home makes sense from a Medicaid planning standpoint.
- Make home improvements. Home improvements are often an excellent use of funds in a Medicaid spend-down. For instance, the community spouse might fix the roof, get a new air conditioning system, new carpeting, new furniture, etc. The intention here is to fix the house up so that, hopefully, no other home repairs will need be done during the lifetime of either spouse. That is especially important since, in many cases, the community spouse may no longer have the resources necessary for large lump sum expenditures which could be required occur later.
- Buy household goods or personal effects. Once again the intention is to have the community spouse get the types of things which are needed to keep the household running without major expenditures down the road.
- Debt repayment.
- Vacation. Can be a good idea for the community spouse at a time when there has been a long struggle to keep a loved one at home. The community spouse may be exhausted and a well-deserved vacation could be rejuvenating.
These are, of course, not the only appropriate items for a spend-down. There are other expenses which world also qualify. The main rule to keep in mind is that whatever goods or services are purchased must be done at fair market value. In other words, giving the money away or paying outrageous amounts for less than the real value of the services can cause Medicaid disqualification.
Also, don't let anyone tell you that anything spent must be done solely for the benefit of the nursing home spouse. On the contrary, virtually anything that benefits the community spouse will also benefit the nursing home spouse.
Finally, keep in mind that while some of these spend-down strategies will not work as well for a single person qualifying for Medicaid, there are other strategies that can work equally well, no matter whether you are dealing with a single person or a married couple. Consult an experienced elder law attorney for guidance.