Medicaid "Spend Down" and Long Term Care

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The new Tax Reduction Act of 2005 mandated that seniors spend-down all of their combined assets before the sick spouse can qualify into a nursing home. The act requires a 5-year look back for any transfers by seniors designed to deprive the state of those available resources to pay for the nursing home.

The Medicaid program requirements are actually established by each State. Whether or not a person is eligible for Medicaid will depend on where you live.

All states provide community Long Term Care services for individuals who are Medicaid eligible and qualify for institutional care. In order to qualify, you will have to effectively "spend down" your assets.

Spend down is depleting private or family finances to the point where an individual is sufficiently poor to meet the eligibility criteria for Medicaid. Improperly following the spend down guidelines can result in your family member's application for Medicaid benefits being deferred which means that he will not receive benefits right away.

Once you are eligible for Medicaid, you have certain rights:

 You have the right to apply for any medical assistance program of your choice.
 You have the right to timely and adequate notice.
 You have the right to a fair hearing
 You have a right to fair treatment.

With these rights, comes certain responsibilities:

 You are responsible for providing true and complete information about your circumstances,
 You are responsible for reporting changes in your circumstances.
 If you have health or dental insurance coverage, you must give the State of Georgia the rights to these payments.

Medicaid strictly limits the assets you can own. Each state has its own limit on this amount and its own guidelines for which assets count toward the total. In general, however, the following assets do not count against you for Medicaid eligibility, and are known as "exempt assets."

-Your home: Your principal place of residence. In some cases, the nursing home resident may be required to show some "intent to return home," even if that never happens. (Be aware, though, that second homes, such as vacation homes or condos, are not exempt assets.)
 -Household and personal belongings: Furniture, appliances, jewelry, and clothing.-
- One car: The state may limit the car's value.
- Cash value of permanent life insurance policies up to $1,500: In most states, this asset is exempt only if the face value of all policies added together does not exceed $1,500. (If the total exceeds $1,500 in face amount, the cash value counts and may need to be spent down on long term care.)
- Cash: A small checking or savings account not to exceed the limit imposed by the state. Most of the time, a single Medicaid applicant may keep only about $1,500 to $2,000. A married couple who both need nursing home care may generally keep a slightly more generous amount. And a married couple in which only one person needs Medicaid assistance can usually keep a larger Community Spouse Resource Allowance.
-Burial space: Fully-paid burial plots, crypts, or mausoleums of any value do not count, for a client or immediate family members.
-Irrevocable Funeral Plan or Burial Trust: A prearranged burial and funeral plan  does not count when the trust cannot be revoked. The portion of an irrevocable funeral plan or burial trust that exceeds $7000 after subtracting the value of fully paid burial spaces may be considered a transfer of assets. Exempt items from the $7000 limit include casket, marker, and vault.
Prepaying your own funeral prior to SSI or Medicaid acceptance allows you to arrange and pay for the funeral of your choice:
WHAT TO BUY
• Make sure the burial plan you purchase includes everything that may be needed. The more you prepay with money that will otherwise need to go to nursing home care, the less your loved ones will need to pay or finance.
• Consider purchasing funeral arrangements, casket, grave liners, opening & closing of graves, flowers, gratuities, limousines, police escort, obituaries, hair styling, makeup, clothing, burial plots, crypts, headstones, including placement and engraving, and expenses of the wake.

As a Family Service Advisor, I work with families every day who are dealing with loss.  Those who have not pre planned or have never even had a conversation about how to deal with final expenses when a loved one dies are usually devastated.  There are 72 decisions that need to be made in the first 24 hours of arranging a burial.
 
By preparing for your final arrangements, your family will have comfort in knowing that your final wishes are being honored. It will alleviate stress and allow them to celebrate you and your life. Request a free "Medicaid Information Pack" Email: linda.morneau@sci-us.com

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Source by Linda Morneau

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