How a Medicaid Spend Down Can Work for You

Medicaid qualification starts with an asset or income assessment. For some Wisconsin residents, this may require a spend down. A sound strategy, but there are confusing and complex restrictions you have to adhere to in Wisconsin. Read on for a brief review to see how a Medicaid spend-down can work for you.

What is a Medicaid Spend Down?

Many individuals in need of Medicaid don’t always quality. For instance, a person may need assisted living or nursing home care. They cannot afford to pay for it. Yet, the government may attest they don’t need healthcare aid because of their income. A spend down is a legal and financial strategy for lowering your income bracket.

The Guidelines of a Spend Down

Thresholds vary state-to-state. What Medicaid looks for generally are individuals with a ceiling of $2,000 in countable assets and $3,000 for singles and married couples, respectively. A spend down constitutes using income on health care or other approved expenses.

An Example of the Spend Down

The income ceiling in Wisconsin varies based on household size. We’ll work with single occupancy. To qualify, your total monthly income must be approximately $1,400. But you’re getting $1,600 per month. You’d have to spend down $200. Only then will Medicaid pay care costs.

Now, depending on your expenses, you could owe thousands in medical costs. If you take $200 regularly to pay that debt monthly, that would be part of your spend down.

As simple as it sounds, this is a complicated strategy that can land you in dirty legal waters. If Medicaid decides 14 months in your strategy’s wrong, you could face penalties and repayment of any health care costs from that period.

You want to get at a Medicaid spend down with savvy preparation. Before you fill out that Medicaid form, do your due diligence for Medicaid and long-term care planning.