Medicaid Spend Down: How To Qualify For Medicaid If You Make Too Much Money

Medicaid Spend Down: How To Qualify For Medicaid If You Make Too Much Money


The Medicaid Spend Down is an often overlooked way to qualify for Medicaid when you make too much money and don’t otherwise qualify.

The reason you might want to do a Medicaid Spend Down is if you are needing medical care services like long-term nursing care or a home caregiver the Medicaid program will pay for some of these costs.

In this article, I will explain the basics of the Medicaid Spend Down and tell you about a special type of lawyer who can help you to through this process so that you qualify for Medicaid.

Let’s first start with what is the Medicaid Spend Down.

What Is The Medicaid Spend Down?

The Medicaid Spend Down is a financial strategy that you can use if your income goes beyond the Medicaid limit set by your state. To accomplish this you will need to “spend down” either some of your assets or income so that it is low enough to qualify you for Medicaid.

Editor’s note: Medicaid is a United States government’s special program designed to help low-income citizenry with medical costs. The program has a defined limit of income, and recipients must demonstrate that their annual income is below that benchmark to qualify and be eligible for the program. 

Why Would You Want To Qualify For Medicaid?

The main reason that senior citizens seek help qualifying for Medicaid is to receive help paying for medical services. Many times people need help paying for either a long-term nursing home or a home caregiver.

While Medicare will pay for a short-term stay in a skilled nursing facility to help you recover, it will not pay for a long-term nursing home. If you also had Medicaid, this would pay for the cost of a nursing home.

Editors note: Medicare is federal health insurance for senior citizens and those with disabilities. Medicaid on the other hand is state health insurance for people with low incomes. It is possible to qualify for both if you are a low-income AND a senior/person with a disability.

The same is true for a home caregiver. If you only have Medicare, this will not pay for a home caregiver. Medicaid on the other hand will pay for these services.

Essentially if you are a senior with only Medicare your coverage will not pay for a nursing home or a home caregiver. You need to find a way to qualify for Medicaid because this insurance will cover these medical services. The Medicaid Spend Down strategy helps you to qualify.

How Does The Medicaid Spend Down Work?

Here is a scenario to better help you understand how this process works.

Let’s say your monthly income is $750 for Social Security, but your state’s Medicaid income limit is $500. This leaves you $250 over the Medicaid income limit and not eligible for Medicaid.

To become eligible you would need to “spend down” $250 of your monthly income on something like medical services. This could include medications, hospital bills that you owe, or your monthly medications. Each state has different spend down rules so you should definitely contact your state’s health department for more clarification.

Once you spend down your income to the Medicaid income limit, then you will be eligible to receive Medicaid services in your state.

What Are Examples Of Services That I Can Spend Money On To Qualify For The Medicaid Spend Down?

According to U.S. News, examples of things that may count toward your Medicaid Spend Down include:

  • Past and current medical bills
  • Hospital bills
  • Medical-related transportation costs
  • Home improvements that are needed due to a medical condition
  • Medical equipment

Again each state is different so you will need to contact your state health department to learn about the things you can count toward your spend down.

Later in this article, I will provide you with a listing of state health departments so that you can call them for questions.

Two Types Of Medicaid Spend Downs: Income And Asset

In this section, you will find two ways to spend your income or assets down to a level where you qualify for Medicaid. Those are income and asset spend downs.

Income Spend Down

An income spend-down requires you to spend a portion of your monthly income down so that you reach the Medicaid income limits.

Once you have spent your money down to the Medicaid income limit on services that Medicaid approves of you will be eligible for Medicaid services.

Asset Spend Down

An asset spend-down will require you to exhaust funds that may be in a savings account, sell a second home, or sell stocks and bonds. These are all examples of “countable assets”.

“Non-countable” assets are things that Medicaid will not require you to sell or part ways with. This could be the house you are living in, a car, or personal belongings.

What Is An Elder Law Attorney And How Can They Help With A Medicaid Spend Down?

An elder law attorney specializes in helping senior citizens understand their Medicaid options.

This type of lawyer will work with you on a plan that is in line with the Medicaid spend-down requirements. 

An elder law attorney typically charges between $175 to $500 to help with a Medicaid spend-down.  Many attorneys even offer the first consultation for free to ensure your situation is a good fit. 

Here in the Houston area, there is a law firm called Holland Elder Law who provides lots of resources to help you understand the process of the Medicaid Spend Down. They also provide legal help to you or a parent who needs help in this area. You can reach them by either visiting Houston Eldercare Attorneys or dialing them at 713.970.1300

Listing of State Health Departments In the US

Below is a listing of U.S. health departments in each state. You can contact these state health departments to apply for Medicaid or simply learn more about the Medicaid spend-down program. 

Conclusion

Medicaid Spend Down is a process that helps you qualify for Medicaid if your income or assets are too high.

The reason you would want to qualify for Medicaid is if you need help paying for the cost of a long-term nursing home or a home care provider. Medicaid will help you with the costs of both of these things.

For more information about the Medicaid Spend Down you can either contact a local elder law attorney or call your state’s health department.

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