Medicaid is a joint federal and state health care safety net for low income seniors, children and disabled citizens. Since it is funded by both the federal and state governments, there is much variation from state to state as to what is covered and who is covered.
What is the income and asset limit for Medicaid?
Each state has its own income and asset limits for eligibility. As an example, in NJ the income limit is currently $2199.00, above which you not be eligible for Medicaid coverage. As far as asset limits are concerned, using NJ as an example, one may keep $2,000 and still be eligible. However, if one’s assets are above the limit for that state, they can still be eligible for Medicaid-sponsored senior care if they spend down their assets properly on eligible purchases. This needs to be done with wisdom and foresight, since Medicaid does not allow an applicant to transfer or sell assets below the fair market value during the five years prior to obtaining Medicaid, known as the ‘look-back’ period.
How does the Medicaid Spend Down work?
Medicaid allows you to make certain purchases on the care and needs of the Medicaid recipient. In simple terms, almost anything that the applicant purchases for their own benefit would qualify as an eligible purchase, as long as it is not given to others and is not extravagant. When there is a spouse, Medicaid views the assets differently. In this blog we are discussing spend down for a single applicant.
What assets may I keep and still be eligible for Medicaid?
• Checking & Savings accounts: One may keep the allowable asset limit amount in a savings account. In NJ the current limit is: $2,000, in NY: $14,850, in PA: $2,400 (or $8,000 depending on income) and in CT: $1,600.
• Other assets: There are some other assets one may keep which will not hinder their Medicaid eligibility, these include; one’s primary residence and one vehicle (in some cases), a life insurance policy with no cash value or a face value of less than $1,500, among other exceptions.
What purchases can I make towards the spend down?
Below, I have outlined some items and services that may be purchased or obtained without jeopardizing Medicaid benefits.
• Prepaid funeral /burial plot: You can prepay the recipient’s funeral expenses using an irrevocable trust and purchasing a burial plot. Some states have a limit on the purchase price of the funeral, so be sure to double-check with your Medicaid office or call Senior Planning Services for a free Medicaid consultation.
• Medical Care: You may spend money on dental work not covered by Medicaid, or purchase better dentures. Buy yourself the more pricey hearing aides — they will be better quality and last longer than the basic ones that Medicaid would cover. Also, purchase some extra eyeglasses — they can easily be misplaced in a skilled nursing setting.
• Medical equipment: Get the better wheelchair or walker. Medicaid may cover these items, but they will not pay for the best quality chair out there.
• Seek Counsel for Medicaid: Hire a Medicaid consultant to help you with the Medicaid process. Call Senior Planning Services today to get the assistance you need –it will be a worthwhile investment, since the money has got to be spent down anyhow. Hiring a Medicaid consultant will save you a whole lot of heartache, while doing it on your own is often an overwhelming task and the smallest mistake can be the reason for a Medicaid denial.
• Special needs trust: Transfer your assets to a “special needs trust” for a disabled child. (This should only be done with legal counsel).
• Clothing: Shop for a new summer and winter wardrobe, and an abundance of socks and undergarment — these can easily disappear in care facilities. And remember to get some comfortable shoes and slippers while you’re at it — you won’t regret it.
• Toiletries: Stock up on toiletries and your favorite pampering creams, shampoos, soaps, body wash, cosmetics, toothpaste and mouthwash, etc.
• Reading Material: Get yourself some good subscriptions to magazines, newspapers, etc. Take a trip to the bookstore and purchase those books that you’ve pushed off buying all these years…
• Electronics: Why not purchase those electronics that you may have always wanted, but thought it was too expensive? Or, how about just getting rid of an old electronic and replacing it for a new one? Some electronic items that are allowed are; TVs, DVDs, CD players, laptops, iPads and phones for the hearing-impaired.
• Other expenses: Other expenses that you can utilize the spend down funds for include; paying off a mortgage, making repairs to your home, updating home furnishings and purchasing a new home or car.
We hope you find some of these tips helpful. Best of luck on your Medicaid spend-down and be sure to reach out to Senior Planning Services for a free Medicaid consultation.