What Exactly is Meant by “Spending Down” Assets for Medicaid or MassHealth?
To be able to pay for certain types of medical care with Medicaid known as MassHealth in Massachusetts, you must first qualify to receive Medicaid assistance. Medicaid is typically reserved for people who have low monthly incomes and/or few available assets to pay for their medical care. There are some people who have too much income or too many assets to qualify for Medicaid. Strategic spending of the excess income can help a person qualify for Medicaid.
The most common way to do this is to put some of your excess income toward medical care. Under Section 1902(a)(17) of the Social Security Act, incurred medical or remedial care expenses paid by some public programs can be applied toward the spend down amounts of the person applying for or receiving Medicaid.
Say, for example, you have an elderly adult with income that’s about $100 per month more than the limit for Medicaid eligibility. If that person pays medical bills of more than $100 per month, the rest of the bills are covered by Medicaid. However, not just anyone is able to spend down their assets in this manner. To qualify, you must be either under 21 years old, over 65 years old, blind or disabled in some other way. Families can also qualify as a whole entity if one or both parents are dead, absent, out of work or disabled.
What does the spend down process look like?
You can essentially think of the spend down process as working in much the same way as a deductible on an insurance policy. With car insurance, if you have repair bills that are more expensive than the deductible, you must pay the deductible price before your insurance will cover the rest. With spending down for Medicaid, you must pay your “spend down” amount before Medicaid is able to step in and cover the rest of your payments for you.
In addition, not every type of medical expense qualifies toward a legal spend down. Some qualifying expenses include medical bills for you, your spouse or your children, bills for a child who does not live with you but who you are paying for anyway, unpaid medical bills from the past for yourself or any of the above people, or any part of any medical bill not covered by private insurance or Medicare. You may need to make payments for prescriptions, medical equipment, transportation expenses to get to your medical appointments, recovery programs or therapy, all of which would work as means of spending down your assets.
If your countable assets or property exceed the requirements for MassHealth, there are often legal ways to spend down assets to preserve resources for a spouse that will remain home. In addition, there are ways to preserve assets for you or a loved one in need of nursing home care. Developing a spend down plan that allows one to remain eligible for MassHealth is possible, but proceeding with caution is necessary to ensure it is done in a legal way that does not jeopardize eligibility for MassHealth long term care benefits.
Develop a Medicaid Spend Down Plan with an Experienced Boston Elder Attorney.
To learn more about Medicaid planning for MassHealth and if you qualify for a spend down, we encourage you to contact an experienced MassHealth planning attorney at Baker Law Group, P.C. We look forward to working with you.