Spend down of assets, part of long term care planning, is a concern of Pennsylvanians who are considering Medicaid or Medical Assistance as an option to pay for nursing home care for a loved one. One of the biggest worries for Medicaid eligibility has to do with finances. Understanding what spend down is and how it works is an important part of long term care planning for a loved one.
There are times when a person might have excess resources or assets to be able to qualify for Medicaid. These excess resources cannot be given away without fair consideration or gifted since such transfers might cause a period of ineligibility for Medicaid.
With spend down as part of long term care planning, the excess assets could be converted into exempt resources, such as with pre-payment for funeral expenses, grave opening and closing or a grave marker. Excess funds could be used by the spouse remaining at home to purchase a more expensive home, furniture or a newer car or to make household repairs. Excess assets could be placed in a Special Needs Trust for a disabled child under the age of 65. Prescriptions, unpaid medical bills, and surgical supplies are all counted towards spend down. Excess funds might even be converted into an income stream for the spouse remaining at home by the purchase of a single premium Medicaid compliant immediate annuity.
Those who are concerned about asset protection and paying for long-term care might be able to use spend down on exempt resources to help obtain Medicaid eligibility sooner for the loved one needing long-term care. If there are questions about spend down or the need for help in obtaining Medicaid eligibility, an elder law attorney can help provide guidance.