Funeral And Burial Expenses
Most states will allow for the pre-payment of certain funeral and burial expenses. This can be a complicated issue, however, since individual states have their own rules about what can be purchased and how much can be invested in these expenses. Check with your individual state Medicaid program or an estate planning or elder law attorneyfor detailed information.
What Are Allowable Medical Expenses For Medically Needy Spend
In every state with Medically Needy Medicaid, money spent on Medicare or other health insurance premiums counts as spending down, meaning it may be deducted from an applicants income when determining eligibility.
Other spend-down expenses allowed will depend on the state. Medicaid may consider any of these to be medical expenses: Doctor bills Eyeglasses In-home help with Activities of Daily Living Portion of assisted living costs allocated for assistance with the activities of daily living Therapies
Can Our Law Firm Help
Yes! We have done thousands of Medicaid applications over many years and we are glad to help you and your family in a difficult time. We charge $200 for an initial conference with attorney D. “Rep” DeLoach III, the person who wrote all of this great material you are now reading, to see if we can help. In our first conference, we will review the elder’s health, finances and legal documents to see what, if anything, needs to be done to help the elder, our client, get and pay for long-term care.
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What If I Don’t Have Bills That Are Equal To Or Exceed My Excess Income
If you do not have medical bills but you need medical care, there is another option called the Pay-In Program. You can pay your monthly excess income amount for any month to your local department of social services. You should only do this if you need services in that month. Ask your local department of social services about this option.
If you do not choose the Pay-In option and you do not have any medical bills that are equal to or exceed your excess income, you will not have Medicaid coverage for that month.
Repair Or Purchase A New Automobile
Buy a new car or make repairs to your current car. If youâre driving with a disability, you can also make your car more accessible for either yourself or your spouse.
If you donât want to invest more money into your current car, you could also sell it and buy a new one.
Either way, the money you spend will bring your assets down and help you qualify for Medicaid.
Also, remember that when it comes to vehicles, only one is exempt. So, if you purchase an additional car, that would count against your spend down.
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Past Unpaid Medical Bills
Past unpaid medical bills may be used to meet your excess income amount even if they are old, as long as they are still viable, meaning that the medical provider is still able to bring a legal action to collect them. These bills may be applied to meet your excess income indefinitely into the future.
- Example: You have a hospital bill from four years ago and received a collection notice from the hospital this year. The bill is for $2,000. Your excess income is $200. You may submit this bill to meet your excess income for six consecutive months. After the six months is over, if the provider is still trying to collect on the bill, you can continue to use the balance of the bill for four more consecutive months.
How To Meet A Spenddown
To meet a spenddown you must tell us about your medical expenses. These can include recurring medical expenses, bills for hospital visits or health insurance premiums. We may need to see proof of these expenses, like receipts for medications or copies of hospital bills. Eligible expenses are subtracted from your total spend-down amount. When your spenddown amount gets to zero, your Medicaid coverage begins.
Here are examples of expenses you should send us to meet a spend-down:
- Medical expenses your insurance does not cover
- Over the counter drugs and medical supplies. For examplevitamins, band-aids and antacids
- Travel costs to see a healthcare provider
- Medical bills you owe before or during the spenddown period
- Medical bills you paid during your spenddown period
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Understanding The Difference Between Exempt And Countable Assets
Assets are a persons financial resources, including cash, money in bank accounts, and the value of ones home. When applying for Medicaid Long Term Care programs, including Nursing Home Medicaid and Home and Community Based Services waivers, one needs to divide their assets into two groups: countable and exempt.
No one applying for Medicaid benefits needs to worry about spending down exempt assets, because they dont count toward eligibility. It only makes sense to spend down countable assets, because countable assets are considered when Medicaid offices determine whether an application should be approved.
List of Countable Assets
The application for Medicaid must include documentation of ones countable assets. Countable assets are also called non-exempt and include the following: Cash Vacation homes or properties other than the applicants primary home Mutual funds Bonds Most life insurance policies
List of Exempt Assets
The value of exempt assets, or non-countable assets, does not get considered as part of Medicaids asset limit. An example of an exempt asset is the applicants primary home, so the value of that home does not matter when figuring out whether someones assets exceed the states Medicaid limit.
Other assets that do not count toward the asset limit include: Personal vehicles Term life insurance policies valued below $1,500 Furniture Personal items including wedding/engagement rings Prepaid burial and funeral expenses
Medicaid Acceptable Ways To Spend Down Assets
An applicant for Medicaid who has assets valued above the allowable limit has some options when it comes to spending down. Its important to take the time to get these spend-down strategies exactly right, and hiring the service of an elder law attorney or certified Medicaid planner is a good idea because violations of Medicaids look-back period will result in a denial of benefits. For more on look-back periods, .
Personal Care / Life Care Agreements: A formal life care agreement, also called a personal care agreement, is between a person who has lost independence and their caregiver . Paying for caregiving, as long as documentation is drafted according to strict rules, can lower assets without violating Medicaids look-back period. The caregiver can continue being paid even after the move into a nursing home, as long as they continue advocating for the Medicaid recipient.
Medicaid Exempt Annuities: These annuities basically convert a large amount of money into a steady income stream. Again, its important for applicants to be sure they purchase annuities in a way that does not violate Medicaid look-back rules.
Paying Off Debt: Accrued debt such as credit card bills, vehicle loans, and mortgages can be paid off without violating the Medicaid look-back period.
Medical Equipment: Assets may be spent on medical devices that arent covered by insurance, such as glasses and hearing aids.
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States Monthly Income Limits For Medically Needy Medicaid
This is a table of Medically Needy income limits by state. In these 32 states, and Washington, D.C., if one spends down income on medical bills and is left with less than the amounts listed, one would qualify for Medicaid to pay for services through the Medically Needy Pathway:
|Monthly Income Limit for Medically Needy Pathway to Medicaid Long Term Care Eligibility Updated Feb. 2022|
Strategies To Spend Down Assets To Gain Medicaid Approval
When one is over the Medicaid asset limit, it becomes imperative to spend down excess, non-exempt assets in order to qualify for Medicaid. In general, any spending is fine, so long as ones assets are not given away or sold for significantly less than they are worth. Gifting ones assets can put one in violation of Medicaids 5-Year Look-Back Period, resulting in a period of Medicaid ineligibility. It should also be mentioned that one should not spend down non-exempt assets by purchasing other non-exempt assets. Because those newly purchased assets would still be counted.
Below is a list of common ways that individuals and / or couples spend-down in order to gain Medicaid eligibility without violating the look-back period. It is suggested one contact a Medicaid expert before undertaking any of the following purchases. Subtleties exist that can result in ineligibility for the program.
Home Improvements Since ones home is considered a non-countable asset, it makes sense to put extra assets into it, which may even be seen as an investment. Home improvements include:
- Putting on a new roof
- Adding a wheelchair ramp or a stair-lift
- Building a handicap-accessible bathroom
- Building a shed in the backyard
Uncovered Medical Devices Examples include hearing aids, dentures, and eyeglasses.
Pay Off DebtOne can pay off credit card debt, their mortgage loan, their automobile loan, etc.
- Funeral director services
- Burial plot
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Tips To Eliminate The Spend
There are special budgeting rules for people who work even a small amount, and for people who used to receive SSI, and those who returned to the community from a nursing home or adult home, and others. See this article to see if you can benefit by these special rules.
If you can’t, consider using a SUPPLEMENTAL NEEDS TRUST TO ELIMINATE THE SPEND-DOWN – People who are “disabled” as defined for Social Security benefits — whether under or over age 65 –may deposit their spend-down into an SNT, and request their local DSS to rebudget their income to disregard the deposited income – this eliminates the spend-down. See more here:
What Does Spending Down Your Assets Mean
Spending down your assets simply means reducing the amount of assets you own in order to qualify for Medicaid. One of the biggest misconceptions people have is that you have to go broke in order to qualify for Medicaid. But this is simply not true.
There are many ways to qualify for Medicaid benefits quickly, while legally sheltering your assets from Medicaid spend down. This is perfectly legal and does not involve hiding anything from the Medicaid agency.
Proper Medicaid planning must be done lawfully and with consideration for both federal and state-specific Medicaid rules and laws. So, while federal guidelines may say one rule applies, it is very important to know what your state’s rule have to say with reference to those federal Medicaid rules.
Your assets must also be under a certain limit to qualify for Medicaid. In Colorado, the asset limit is $2000. Having assets above the limit does not mean that a person cannot become eligible for Medicaid benefits because certain assets are exempted or not counted towards the asset limit. After considering non-counted assets, if a person’s assets exceed $2000, then they will have to spend down their assets to qualify for Medicaid. However, asset spend down must be done with caution because there is a look back period for reviewing past transfers. During this look back period, if a person sold or gifted assets for less than fair market value, then a period of ineligibility will be applied.
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What Is A Medicaid Spenddown
If you have certain qualifications for Medicaid for Children and Adults you may be able to get Medicaid through a spenddown. To get a spenddown, you must meet all Medicaid eligibility criteria except that your income is over the limit. Medicaid for the Aged Blind and Disabled may have different rules. You can also learn more about all Vermont Medicaid programs.
If your income is over the limit, a spenddown is a way to lower your household income so you can get onto Medicaid. The difference between your household income and the Protected Income Level is calculated to create your spenddown amount.
You will have a six-month period to meet your spenddown. With a spenddown, you should keep track of certain medical expenses that can be used to reduce your income. Once you meet your spenddown, your Medicaid for Children and Adults will start.
As long as you meet the spenddown requirements, you can ask for a spenddown every time you apply for Medicaid for Children and Adults and are told your income is too high.
Once My Past Medical Bills Have Been Used To Meet My Excess Income How Do I Meet My Excess Income From Then On
Each month in which you need Medicaid services, bring in, send or fax your paid or unpaid medical bills to your local department of social services. Only send these bills when they are equal to or more than the amount of your excess income. You can send in paid or unpaid bills or receipts for multiple bills that add up to your excess income.
You should make doctors’ appointments or fill prescriptions early in the month. This will help you meet your excess income amount faster. Once you reach your excess income amount, Medicaid will pay for covered services for the rest of the month.
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How Does The Medicaid Spend Down Work
Here is a scenario to better help you understand how this process works.
Lets say your monthly income is $750 for Social Security, but your states Medicaid income limit is $500. This leaves you $250 over the Medicaid income limit and not eligible for Medicaid.
To become eligible you would need to spend down $250 of your monthly income on something like medical services. This could include medications, hospital bills that you owe, or your monthly medications. Each state has different spend down rules so you should definitely contact your states health department for more clarification.
Once you spend down your income to the Medicaid income limit, then you will be eligible to receive Medicaid services in your state.
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What Exactly Can I Spend Money On When Spending Down Assets To Qualify For Medicaid
You can spend the money on anything for your mother. There is no limit. However, at some point the Medicaid agency may question whether the spending really is for your mother. For instance, how many sheets and blankets does she really need? One step many people take as part of their Medicaid spend down is to prepay for their funeral. For more information on spending down for Medicaid, .
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Who Is Eligible For The Medicaid Spend Down Program In New York
To be eligible for a Medicaid spend down in New York, you must meet the following requirements.
- Youâre under the age of 21
- Or, youâre 65 years of age or older
- Youâre certified blind
- Youâre pregnant
- Youâre the parent of a child under the age of 21
If you fall under any of these categories, then you might be eligible for Medicaid through the excess income program even if your income is too high.
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What Are The Most Common Mistakes You See People Make With Medicaid Spend
Ramirezs answer: The first mistake people make is spending all of their money. This leads not only to the individual having no money left but also to penalties within the Medicaid system.
For example, a person in California who gives away $55,000 just to qualify can be penalized and not be able to receive Medi-Cal for six months.
Another common mistake is parents adding their children on titles as joint owners of assets such as homes, vehicles and bank accounts. Not only does this not help for Medicaid purposes, but it increases your liability, can have severe tax consequences, and may be seen as an ineligible transfer, which leads to a penalty waiting period.
Perhaps the biggest mistake I see people make is to try to do all of this without seeking the advice of an elder law attorney. There are so many rules about assets, income, gifting, applying, redetermination, and estate recovery that many clients create major problems for themselves that could have been easily avoided by a trip to see an elder law attorney before doing anything.
People tend to assume that they are allowed to simply give away their assets in order to gain Medicaid eligibility. However, if youve given away assets during the last five years before you apply , your coverage can be temporarily denied.
Meeting with an elder law attorney early on in the process will help make sure your senior has access to medical care when he or she needs it and reduce stress for everyone down the road.