Medicaid Spend Down
Perhaps you’ve heard that Medicaid will take everything that you own away from you before it will begin to pay for your care. Perhaps you’ve been told that you will definitely lose your house. These are not necessarily true statements. Whether you are married or single, the Medicaid spend down provisions are incredibly complex, but understanding them essential for your long term planning.
The first thing to understand is the 5 year lookback period, which is an audit of assets that you have gifted to family members in the five year period be ore your application. Depending on the total value of gifts that you have made, you will be declared ineligible for a certain period of time. The higher the value, the longer the period of ineligibility. It is important to note that even if you have sold as asset to someone, if you sold it for less than the fair market value, it will be considered a gift.
If you are married, and one spouse will live at home (called the community spouse) while the other is in the nursing home, then the community spouse is entitled to one half of the assets and to continue living in the home. That means that only one half of the couple’s life savings need to be spent down. Moreover, the savings does not necessarily have to be spent on nursing home care. If the community spouse wants to spend the money on home improvements or a new car, that is an acceptable method of spending down. The community spouse may be able to keep a portion of the other spouse’s income, as well. In essence, Medicaid does not attempt to cause the community spouse to become destitute.
If you are single, your home is not a countable asset for Medicaid eligibility. However, after your death, your home may be subject to Medicaid estate recovery. Moreover, you cannot use your income to pay the taxes and utilities on your home if you are on Medicaid. However, there are a few ways to transfer the home to your children without it being subject to the 5 year lookback.
Estate recovery is a particularly complex and intimidating aspect of Medicaid. When a Medicaid recipient passes away, Medicaid tallies up what it has paid to care for that person and then sends a bill to the estate. If a person is married, the community spouse can protect assets from estate recovery (as well as him or herself from losing valuable property). However, if a person is single, there generally is no way to prevent Medicaid from recovering all or a portion of what it spent on care. Even a life insurance policy is subject to estate recovery.
Hiring an experienced Elder Law attorney is absolutely necessary if Medicaid will be part of your future care planning. Medicaid is very complex and the system is massive, so hiring someone to help you get through the system is one of the very first steps you should take in planning for your future care. The team at Behrend and Ernsberger, P.C. has the skill and experience to help you plan around Medicaid- call us today at (412) 391-2515.