What is a Medicaid spend down? Elder law attorney Jim Koewler joins Suzanne Newman to answer this question, and shows how it differs if you’re single or married.
In the previous segment, we talked about what to do if you’re married and you or a senior loved one needs care now — a crisis situation — and have some money available.
With a single person, if they want VA coverage, they have the same asset limits of $130K. If they want Medicaid long-term care coverage, they need to reduce assets to $2K, or their state’s level, which is very different from the VA level.
How you do that is through a spend down. A spend down is spending the excess money above your limit on anything that gives you roughly equal value. If you want to hide your assets, for example by buying your son’s junk car for $25,000, that is not considered a legitimate expense. Buying hearing aids, extra eyeglasses, dentures, those purchases are OK. Buying ten $1,000 TVs is acceptable as long as you don’t give them away. Pre-paying your funeral and your spouse’s funeral (you can’t over-pay), funeral services, is a great way to use extra money.
You may be required to private pay your care until spend down is finished, in some places, but check those details with a lawyer. Acceptability of donations varies by state, and sometimes even by case worker. Most cases involving church donations have been allowed, but donations have to follow your previous pattern of donation.
Jim Koewler addresses later-life financial and legal issues. Talk to an elder law attorney to guide you in your state with your situation. Learn more at Answers for Elders or at Jim’s website.
View Episode Transcript
*The following is the output of transcribing from an audio recording. Although the transcription is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or transcription errors.
The following podcast is by Mr Jim Koewler, elder law and special needs attorney, helping and protecting those who need long term care. And Welcome back everyone to answers for elder’s radio network with the wonderful Jim Taylor, elder law. Tourney out of Ohio, Richfield, Ohio, and you were right outside the Cleveland area. Is that correct, Jim? I’m trying to remember exactly where. Halfway between Cleveland and ACRIN. I’m in the next county. So depends whether I’m Matti Cleveland whether I’m willing to say I’m in the Cleveland area. Oh well, well, being given that I’m in Seattle, I kind of think, well, you know, you’re in the point of cleave. Cleveland is clean, is the one you can see on a map. ACRON’s much smaller, but yeah, I’m actually in the county with Akron to the extent of matters. They do a lot of work in Cleveland. And it’s interesting because I live like halfway between Seattle and Everett, right and it towards the water. So so Everett is like the next town. There’s a navy base up there. So I do the same thing, but I live in Muckleto, but people go, how close is that? So, yes, same kind of deal. Some about twenty twenty, your twenty one miles from each downtown. Well, there’s something. It’s kind of a nice location to be in, for sure. It’s a great place. Yeah, so we’re going to get back to this topic because, Jim People, you know, we we hear the term, quote unquote, spend down. Right, people have no clue what this is a I probably talk to families all of the time and they don’t even know where to begin, especially if someone is married or if they’re single. So there’s a discrepancy, is they’re not? Yes, there is, and but the difference really is in amount. But okay, if you’re married. There may be a method of spend down, and I really need to use quotes on that, because it called, as they spend down for Medicaid purposes, but still preserves resources, assets, what most people call them, stare and resources. Through a really roundabout way, you get to remember you know you want to be with long term care and look for medicator, BEA benefits. You are stepping to Alice’s looking glass into wonderland. Down is up, up is down, and only keep it straight by smoking weed with the Caterpillar with the hookah. So yeah, you can tell how quickly, how often I’ve said that, how quickly tips off my tongue. But yeah, it really is. You know, you can have too much money in my world. You can have too much income in my world and in the real world. What does that mean? But that makes no sense in the real world. So there are differences. Okay. So first of all, we talked in our last segment about married couple and what you can do with a married couple in town. Medicaid allows you to split and va doesn’t allow you to split, but it ends up kind of be in the same anyway with a single person. If a single person wants to be a coverage, they are under the same asset limit or resource limit. If use medic Kate’s language. Va doesn’t use it medicates language of a hundred thirty thous we talked about the real estate being different in between Va and Medicaid and that’s still true. Okay, right, they can have more money under if they want to seek Medicaid for long term care. Okay, Long Term Care Medicaid coverage, then they got to get down to two grand or fifteen hundred or sixteen hundred, very state specific. Most states use the federal one of two grand. Okay. So not much a big difference between what va allows and when Medicaid allows. Okay. So remember that’s the number I said you have to get down to. If you’re if you’re married, you see the applicants piece has to go down to two grand or fifteen or sixteen hundred. Okay. Well, if you’re set, and I think it’s got to get down to two grand. Okay. So how can you do that? What is a spend down? Spend down is spending the excess money there, the excess resources, whatever is above your limit. Let’s just say two grand, because one, that’s most states and two, that’s my state. Okay. So whatever is above to grand has to be spent down or otherwise dispensed with. But a better acceptable spend down is spending on anything at which you get roughly equal value. Okay. So if and most places you’re allowed to have an automobile, so if you would have a spend down and hide giving a money in it, let’s say you buy your son’s junker car for twenty grand and it’s worth a thousand. That’s not going to be a legitimate spend down. Okay, but if you buy hearing AIDS, if you buy extra I gland, I mean extra eyeglasses, or run a nursing home, get extra glasses or your home. Still get extra eyeglasses. They get misplaced, extra eyeglasses. If you wear your hearing aids, get an extra set. Get an extra set of dentures if you are dentures. Yeah, that’s kind of Oogy, but still they get damaged. Okay, those are all spend down. Those are all okay. You, if you’ve got tenzero too much money and you buy ten Onezero TV’s, as stupid as that would be, it’s still acceptable spend down, as long as you don’t give away the TV’s. You can prepay your funeral you complete one of my favorites is after we do the other stuff, that lift chair, if if you’re safe on your feet, the dentures, the eyeglasses, the hearing aids, those are my favorites because that really impacts your quality of life. After that. Yeah, prepaying your funeral, prepaying your spouse’s funeral. You can’t overpay. You can pay what the cost estimate is and you can, in theory, lock it in if you pay it at a funeral home with some f your arms. Don’t really do that. And stuff that’s not under the control of funeral home, like the casket, that’s not going to be locked in anyway, because if you’re a home can’t, can’t control that. When you can lock in is the cost of the funeral home services. Okay, right, but so you may not. The family may have to make something up when you die. But so you’ve paid most of it. Okay, that’s a great thing. In some states, like mine, for example, you can prepay funeral insurer and for others or your prepay their funeral at the funeral home. But we, I doen’ally like to use insurance. The reason we can do it here is because whoever wrote the rule and prepaid funerals wrote it so poorly. I could prepay your funeral if I was seeking long term care. Are you and I are not related at all, but the rule is written so sloppily that I can. Okay, amazing. Yeah, but then when you died you don’t use it all. It comes back to me if I’m still living. So but you know, you do it for family. It’s no problem. Sometimes I have to walk a case worker through it. Okay, prepaying a funeral is a great way to use that money because you’re pretty sure going to have a funeral. Okay, I’m assuming you’re going to die, even if you don’t need long term care. I suspecting I die at some point. No one’s beaten that yet to my now. So that is a great way to use extra money. Okay, what the few know what the nursing home or assistant living a home carriage is. He want you to do is private pay them until your money’s gone. Right, that’s still an okay spend down. It may not be the spend down you want, but I require it, and I hate to say it, like some, there’s some communities that require people to pay privately for two years before the convert them and take Medicaid. That happened out here. Some I here require them to pay until the money’s going. Yeah, they demand to know every dollar you have and yeah, they required to be paid to them. The thing is, if they accept Medicaid, they have a harder time doing that. Now, assistant livings were allowed to do that here in Ohio. I suspect they were allowed to do that in many states. Okay, are allowed to have some private pay and and potentially demanded as long as they can get it, okay. But if it’s a nursing home, they can’t do that right. Right, and and if it’s a it was assisted living, you look, have someone look carefully at their terms and conditions, their admission agreement or residence. You agree with yeah, they call it there may be a loophole there. Just have a smart lawyer look at it and maybe only what you disclosed has to be privately paid. Sir, sir, Kay, so there are other ways to skin that cat that may or may not be successful. Right. So, so I’m I know the answer, but I really want to bring it up just for Clare Clarity. There’s a lot of seniors out there specifically, that are tithing regularly to their church or their charitable cause or something like that. What happens in those situations? ASS The coin? Okay, it really is dependent. They can be county dependent and it can be case worker dependent. I’ll say the law and the rules say if there is a pattern of giving and that is simply continuation of the previous existing pattern of giving, correct, then it won’t be penalized. Right. However, I have seen a lot of pushback on those from various count and then the next county yep, Yep, fine, no problem, just flies through. Well, in church membership. Church membership is oftentimes contingent upon that tithing and in that case I have seen I might’s my understanding. That’s why I want to clarify clarity that usually they will allow that. Yeah, but I want to make sure that that’s I wanted to get that from you. Yeah, and I wish I had a clear cut answer for you. I think most cases on that have one and frankly, in large part because the church is a difficult constituency to anger right that you get a lot of pushback politically. So I think most cases of one. But you have to be consistent with what you were doing before or you can’t just all of a sudden. If you’ve never tithed to a church and then give a tenzero check, that’s going to be a red flag. Or even you have tithed and the tithing was four hundred a month. Yeah, and almost you gave it once and Nope, they will jump on that. Correct, that correct. Not all the pattern of giving. So it’s a consistent amount every month. So if you’re tithing or every every year? Yeah, every, whatever your pattern was, they will allow you that pattern or not. Right. They will allow you to really jump from that pattern. Right, if you had been two hundred and then several years ago you went to three hundred and a couple years after that you went to four hundred, there were probably have to honor. Are you sticking it? Four hundred? But if you try to go to five hundred right before you apply for Medicaid, Nope, got penalize a hundred they may have been. Applies the whole five hundred. Got It just because you’ve changed? Yeah, and it depends how much pressure they’re getting from their governor to find ways to cut the costs. Sure, and that’s the kid. Main thing is like to talk to somebody like an elder law attorney that can help to guide you in your state, because every state is different. I know. And washing the state you’re allowed to have three thousand dollars. Yeah, okay, so we’re different in that way. But a lot of what you’re saying is absolutely true, and that is we’ve I’ve talked to several families that have said, well, can’t, my mom has, you know, Twentyzero in the bank. But we really need to get going on Medicaid. But she can’t really qualify to even apply until she’s got three thousand left. So can we give it all the church? No, you can’t. Know, you have to do it for yourself. So those are some things that that amount of money is really good for. Funeral Planning with other flame it family grand that’s what I was around in your state. Yeah, yeah, it is allowed in your state. Yeah, so that that’s really tricky and I realized we didn’t get to what can we do with the extra money when you have a spouse? Will cover that in some future segment? That’s really interesting and also very, very state dependent. Absolutely. Absolutely. And so what do you do when it’s time for care and you know that there’s some resources out there for you? Jim and I are having this discussion today and we’ll be right back right after this. State of Ohio residents, you have a friend to help you navigate long term care while protecting your assets. You can reach Jim at www seniorscom or just email him at j Koewler afe. That’s J Kayler AFE at protecting Seniorscom.
Listen to More Answers for Elders with Suzanne Newman
Keep an eye out for future Answers for Elders podcasts on the Senior Resource Podcast Network! Thanks for listening, and be sure to keep scrolling for more articles by Suzanne. For more AFE podcasts, visit AnswersforElders.com and subscribe on your favorite platform!
Founder and CEO of Answers for Elders, Inc., Suzanne Newman proclaims often, “Caring for my mom was the hardest thing I ever have done, but it was also my greatest privilege.” Following a career of over 25 years in sales, media, and marketing management, Suzanne Newman found herself on a 6-year journey caring for her mother. Her trials and tribulations as a family caregiver inspired an impassioned life mission outside of the corporate world to revolutionize the journey that so many other American families also find themselves on. In 2009, she became the founder and CEO of Answers for Elders, Inc., subsequently hosting hundreds of radio segments and podcasts, as well as authoring her first book. Suzanne and Answers for Elders, Inc. have spent 14 years, and counting, committed to helping families and seniors along their caregiving journeys by providing education, resources, and support. Each week on the Answers for Elders podcast, Suzanne is joined by vetted professional experts in over 65 categories including Health & Wellness, Life Changes, Living Options, Money, Law, and more. Suzanne lives in Edmonds, Washington with her husband, Keith, and their two doodle dogs, Whidbey and Skagit.
Connect with Suzanne
Visit AFE on the web: https://answersforelders.com/