Many people in Kansas City may find that, as they age, they incur a significant amount of medical expenses. They may wonder how to cope financially with such costs. For some individuals, qualifying for Medicaid could be the financial lifeline they need to afford their medical care. However, Medicaid has income limits. If your income and assets exceed these limits, you may not be eligible for Medicaid. However, through a Medicaid “spend-down” you may be able to qualify for benefits.
A Medicaid spend-down is a way to show that you are unable to afford your medical expenses. There is a certain amount of medical expense you must have, which is known as your deductible. Keep records of your medical bills, as well as travel expenses for medical treatment, medical equipment and over-the-counter medication. Medicare co-pays and premiums may also count. If you have enough medical expenses to meet your deductible, you may qualify for benefits.
That being said, some individuals simply have too many assets to be eligible for Medicaid. If this happens, it may be possible to ‘spend-down,’ that is, transfer assets so that you are eligible for Medicaid. Some examples of acceptable asset transfers include: those transferred to a spouse or third-party for that spouse’s benefit, those transferred by a spouse or third party for that spouse’s benefit, those transferred to a person with a disability, setting up a trust for a person with a disability and, in general, transfers made for a reason other than being eligible for Medicaid.
That being said, not all asset transfers are allowed and Medicaid will examine up to 60 months of your past financial actions, in order to see where you transferred your assets. If they find that an asset was transferred solely in order to execute a spend-down, you may no longer be eligible for Medicaid for a certain amount of time.
A Medicaid spend-down can be complex, and this post cannot cover all the details of a spend-down or guarantee whether or not you will qualify for Medicaid. Those who are interested in Medicaid planning may want to make sure that any asset transfers they make will not affect their eligibility for benefits.