you can qualify for Medicaid benefits by spending down assets to cover the cost of long term care

Qualify for Medicaid Benefits by Spending Down Assets

You can qualify for medicaid benefits by spending down assets to pay for long term careWe often are asked if a parent sells assets to have funds to pay for a nursing home, or assisted living facility, will there be a penalty or waiting period before the parent can qualify for Medicaid benefits. The simple answer to that question is no. There is no transfer penalty or waiting period when an applicant for Medicaid benefits sells property and uses the property to care for the applicant. However, the sale of the assets must be at fair market value. The applicant will need to demonstrate that the property was sold at fair market value and how the proceeds were spent.

The often bigger question is, how can a parent qualify for Medicaid benefits by spending down assets, and avoid using all of the funds for long term care? Medicaid has strict asset rules that compel many applicants to “spend down” their assets – before they can qualify for qualify for coverage. It is important to know what you can spend your money on without endangering Medicaid eligibility.

To be eligible for Medicaid, applicants can have no more than $2,000 of “countable” assets. Medicaid also has strict asset transfer rules. If an applicant transfers assets for less than fair market value, the applicant will be ineligible for Medicaid for a period of time. However, applicants for Medicaid, and their spouses, may protect savings by spending them on “non-countable” assets. Care must be taken to ensure that funds are not spent on items that will cause a loss of benefits or a penalty period where benefits are not available under any circumstances.

There are several options to qualify for Medicaid benefits by spending down assets, on things that benefit the applicant (and perhaps the family). Many of these items will not affect the applicant’s eligibility for Medicaid benefits to pay for long term care. Essentially, the Medicaid applicant can qualify for Medicaid benefits by spending down assets on anything that will benefit the applicant.

Examples of How a Medicaid Applicant May Be Able to Spend Money Without Causing Loss of Eligibility for Medicaid Benefits

  • Prepay funeral expenses. A prepaid or pre-need funeral contract allows you to purchase funeral goods and services before you die.
  • Pay off a mortgage, car loan, or credit card debts. You can pay off the debt fully or make a partial payment.
  • Make repairs to a home. Fix the roof, make the house handicapped accessible, buy new carpet, etc.
  • Replace an old automobile. This can be useful for the healthy spouse or a child who provides the parent with transportation.
  • Update your personal effects. Buy household goods or personal comfort items. Buy a new wardrobe, electronics, or furniture.
  • Medical care and equipment. Purchase items that aren’t covered by Medicare or Medicaid. See a dentist or get your eyes checked if those items aren’t covered by your insurance.
  • Pay for more care at home.¬† Make sure you get any caregiving agreements in writing, especially if family members are providing the care.
  • Buy a new home. A home is an exempt asset in Florida, so it may be possible to purchase a new home without creating a penalty period or loss of benefits. The home will need to comply with the Florida requirements for homestead to qualify for the exemption. And, the applicant must actually occupy the home as the primary residence.

In the case of married couples, it is often important that any spend down steps be taken only after the unhealthy spouse moves to a nursing home. This is especially true f such an action would affect the amount of money the community spouse would get to keep, called the community spouse’s resource allowance.

We can help you qualify for Medicaid benefits by spending down your assets that complies with all of the myriad of Medicaid regulations. Medicaid benefits can save your family tens of thousands of dollars every year. Call us to schedule a time to discuss how you or your loved one can qualify for Medicaid benefits to offset the costs of long term care. Call us now (904) 448-1969, or toll free 1-866-510-9099.