Medicaid/Medicaid Assistance planning may involve the spend down of cash and assets to qualify for eligibility. Pennsylvania residents trying to figure out how they will afford nursing home care may find themselves trying to figure out how their funds can be reduced. This is known as a ‘spend down’.
How does a spend down work for Medicaid planning? Funds may be spent in a variety of ways. For example, funerals can be pre-planned and prepaid. Cemetery plots can be purchased. Grave opening and closing can be prepaid as well as the cost of a grave marker. Funds can be spent on outstanding medical bills. It may also be permissible to buy personal items such as clothes or toiletries.
It is important to know what expenses can count towards a spend down. If there a large excess amount of funds, a mortgage can be paid off or a home equity line of credit can be reduced. A car loan may be paid off or a new car may be purchased to replace on older model. It might make sense to trade in a large older 3-story home for a more expensive one-story condominium. Sometimes, money may be spent down by hiring caregivers to help at home.
The federal regulations surrounding spend down can be complicated and vary, depending on the Medicaid rules of the state. They also can keep changing, further frustrating someone trying to understand the rules. It might be helpful to speak to an experienced elder law attorney for guidance on how to engage in Medicaid/Medical Assistance planning.