QMC assists families with the process of spending down their assets while on long-term care, often towards eventual Medicaid eligibility when the assets have been fully spent down. There are several challenges that are present when a person is receiving long-term care in a nursing home and is in danger of exhausting their non-exempt assets and needing Medicaid benefits.
First, and explanation of what the term Spend Down refers to. Spend down simply refers to the expending of a person’s assets (annuities, bank accounts, mutual funds, investments, possibly retirement accounts (including IRAs), real estate outside of the home, and any other countable assets) on long-term care with the anticipation that those assets may be fully expended during the term of that care.
The first step in working through a nursing home care recipient’ spend down process is to analyze each asset to determine what assets must be expended on care and which assets are exempt from being spent on care and are deductible from the final spend down amount.
Once the Medicaid spend down assets have been identified, the next step is to determine if any of the assets required to be spent down have obstacles to liquidation. Does the care recipient have his or her capacity? If not, is a proper power of attorney in place to liquidate assets? Are there joint owners that must participate in the liquidation process? Are these joint owners available? Are they willing to cooperate with the liquidation? Are there any joint asset owners who have passed? Will a probate be necessary? Finally, are there any assets that are relatively illiquid and will take time to sell, such as real estate? Are there sufficient alternate funds to pay for care while the hard-to-liquidate asset is being sold?
These are the questions that QMC can assist with in order to ensure smooth spend down and a positive working relationship with the nursing home facility.
Additionally, it is important to understand what the spend down assets can be used on, and what are the prohibited expenditures under the Medicaid rules. For starters, of course spend down assets are used to pay for the long-term care expenses. Typically, monthly income, such as social security, SSI and pensions are designated to pay for long-term care, with spend down assets used to pay for the excess monthly bill. Additionally, medical bills not covered by Medicare can always be paid from the spend down assets; medical expenses are always allowed. Healthcare premiums and other health insurance premiums may be paid. These allowed expenditures include hearing aids, eyeglasses, any other medical services or hardware, medical care, enrollment in supplemental health coverage plans, etc.
For married couples, each of these expenses for either spouse are allowable expenditures.
Also, in most cases, the Medicaid program allows any outstanding debts to be paid from the spend down assets. These expenditures can include payment on the mortgage on a principal residence or other real estate.
It is also important to highlight what the spend down assets may not be used to purchase. Principally, it is important to understand that spend down assets, in almost all cases, may not be used for gifting to family members or loved ones. Most gifting violates the eligibility requirements and will trigger a penalty period before qualifying for Medicaid coverage . Eligibility is typically limited to Medicaid applicants who have not in engaged in gifting in the previous 5 years.
QMC’s services are designed to construct a workable and compliant spend down program for each of our clients with no risk of ineligibility. Please do not hesitate to contact our firm and let our professionals walk your loved one to smooth eligibility Medicaid long-term care benefits.