Medicaid – How To Know When To Spend Down and When Not To!

We are asked all the time in our office about the Michigan Medicaid spend down. What is it, anyway? Medicaid eligibility for the nursing home, assisted living, or home care holds basically two major requirements:

  1. Medical Eligibility. You must require assistance with a certain number of activities of daily living (cooking, transferring, bathing, toileting, and more).
  2. Financial Eligibility. You can’t have more money or assets than the Medicaid program allows.

In order to qualify financially, many people looking to utilize Medicaid to pay for long-term care may think they have to spend down assets to attain Medicaid eligibility. Sad fact? Most families spend down far more than is required. The simple reason is that they don’t know the rules. This financial eligibility requirement is where our Medicaid planning attorneys can assist and assure you follow the Michigan Medicaid rules and don’t spend down more than you have to

To be financially eligible for nursing home Medicaid, the rules are drastically different depending on if you’re married or single/widowed. There are assets that you can keep while on Medicaid and there are assets that you are not allowed to keep in order to qualify – in other words, what you use the money for to spend down to qualify for Medicaid is important. Which assets you can keep depends on the value and the values ultimately help determine the best course of action to accomplish your goals and obtain Medicaid. That’s where the attorneys at Alles Law come in and work with you to develop a personalized Medicaid spend down plan for you or a loved one.

There is another important issue to take into consideration when developing a Medicaid plan, and that is Estate Recovery. Yes, the Medicaid rules allow you to keep certain assets during your lifetime (often called “exempt” assets) and still be eligible for Medicaid to pay for your care. However, when you die, the government has the right under law to take those assets back to reimburse themselves for paying for your care during your lifetime- but only IF YOU DO NOT PLAN APPROPRIATELY! This is “Estate Recovery.” If you do not plan, the government will “recover” from your “estate” what they allowed you to keep during your lifetime, but not until after you die.

A proper plan requires extensive knowledge of the Medicaid rules and regulations (which often change!) for current eligibility as well as planning to avoid estate recovery and other pitfalls. This information merely scratches the surface of all that is involved in planning for Medicaid. Call us today at 616-365-5055 to schedule a free consultation and discuss what Medicaid planning could look like for you or a loved one.