The Medicaid Spend Down Scramble – Part 1
I have written in past blog posts about Medicaid’s 5 year look back and the need to be familiar with the transactions that Medicaid will be reviewing. We still, however, receive many calls where a quick spend down to Medicaid is necessary.
In the case of a married couple where only one spouse is applying for benefits, the spend down is especially important to the healthy spouse. Determining the amount that spouse can keep under the community spouse resource allowance (CSRA) is one part of the process. Countable assets are divided in half and the healthy spouse can keep 1/2 of the assets but only up to a certain maximum amount ($154,140 in 2024).
In addition to countable assets, the healthy spouse can keep exempt assets such as a home (if either spouse is living in it) and one car. There is no limit to the value of these assets which leads to opportunities to maximize what the healthy spouse can keep, an important consideration since we never know how long that spouse may live or what his/her needs may be.
The potential of a Medicaid penalty, however, is another important piece to the equation. A significant penalty which is effectively tacked on to an expected Medicaid start date can cut into the amount of money that the healthy spouse keeps after Medicaid is approved for the ill spouse. This can raise the stakes of what I call the spend down scramble.
Next week I’ll explain what I mean.