Medicaid – What is Spending Down?

If you are applying for Medicaid, the institutional spouse (spouse in nursing home) and their community spouse (spouse not in nursing home) may protect their assets and lifelong savings, retirement IRA etc. by spending those assets on noncountable assets. These expenditures may include:

  • prepaying funeral expenses,
  • paying off a mortgage,
  • making repairs to a home,
  • purchasing a new automobile,
  • updating home furnishings and equipment,
  • purchasing insurance up to $1,500
  • buying a new home, if under $500,000, (in some states $750,000)
  • puchasing an annuity

In the case of married couples, it is often important that any spend-down steps be taken only after the unhealthy spouse moves to a nursing home if this would affect the community spouse's resource allowance.

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