How does a Medicaid spend-down work?

The costs associated with long-term care often leave people reeling. Though you or a loved one may need extended care from professionals, you may struggle to pay the bills associated with the attention and treatment needed. As a result, you may want to take the time to plan ahead before that time comes.

Fortunately, you likely have various options when it comes to long-term care planning. In particular, when it comes to costs, Medicaid may be able to help. However, Medicaid comes with certain stipulations that you or your loved one must meet before having the ability to obtain benefits.


A major aspect of qualifying for this government benefits program is the amount of assets a person has. While Medicaid can often help individuals on low incomes and those with disabilities, you may have the chance to qualify even if you do not fall under the federal limits. However, you will likely need to provide evidence that you cannot pay the medical bills associated with care.

Spend down

If you fear that you have too many assets and that you cannot prove your inability to pay the applicable bills, you may want to consider spending down. A spend-down refers to transferring assets out of the estate in order to qualify for Medicaid. Of course, if you do want to take this approach, it may be in your best interests to do so early. Medicaid officials often do what is known as a five-year look-back to see what you did with your assets in that time.

In some cases, if officials believe that you purposefully moved assets or funds specifically to qualify for Medicaid, you could face penalties. Those penalties may even include excluding you or your loved one from qualifying for benefits for a certain period of time.

Spend-down success

While Medicaid spend-down can often help individuals qualify for much-needed benefits, it is not an easy task to complete. You may need to utilize certain tools, like trusts, in order to effectively transfer funds. If you do not have the right information about your options, you may not know where to start.

Fortunately, an elder law attorney can provide reliable information and guidance on how you can prepare for the expenses of long-term care and potentially qualifying for Medicaid. Enlisting the help of a professional may allow you to create the best plan for your circumstances.

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