‘I’ve heard about a Medicaid spend-down –what is that?”
A Medicaid spend down relates to how much money has to be spent before Medicaid eligibility is achieved. Medicaid is a welfare program that’s based upon financial need, and financial need has two components. There’s a resource component and an income component, so a person must be both income eligible and resource eligible. If you’re a single individual, you can only have $2,500 to be eligible for nursing home Medicaid benefits. If you start with $100,000, then you’re not eligible. You have more than $2,500. So in order to be eligible, those funds have to be spent. That’s known as the Medicaid spend down. You have to take your assets and bring them down to the allowable levels. There are different levels when there’s a married couple. But let’s just say that there’s still $200,000 excess, those assets have to be spent before a person is eligible. There are many options about spending the funds that can be protective to a spouse at home or even be beneficial to someone in a nursing home but the spend-down is the process of meeting the resource eligibility limit or the Medicaid program.