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Are You Spending Down to Medicaid Eligibility?

Article submitted by Dick Dorrough, Certified Medicaid Planner. Dick Dorrough is with Medicaid for Colorado and offers professional long term care Medicaid assistance help with Long Term Care Medicaid Applications and Planning. He can be reached at 303-829-0205 or visit the group’s website.

To qualify for Medicaid, one must be evaluated and approved on three levels, physical/mental, income, and resources/assets. The most misunderstood term for asset eligibility is the word “spend down.” From a Medicaid point of view, a single applicant must have less than $2,000 in countable assets to qualify for Medicaid in terms of resources. For a couple where one of the members is not on Medicaid, the countable assets must be less than $123,600 not counting one home and one car. Final expenses can also be structured to be excluded from consideration.

An applicant does not automatically become qualified for Medicaid just because their resources/assets have dropped to the $2,000 level for an individual or $123,600 for a couple. There are three areas of consideration for eligibility. Not only must they be evaluated by the Colorado Single Entry Point for physical or mental qualification, their income must be below $2,250 (300% of the poverty level). If their monthly income is above the $2,250 level but below $8,940 per month, they can still qualify for Medicaid. The applicant must complete an Income Trust form for submission with their Medicaid application.

Reducing your countable assets to less than $2,000 is only one step in obtaining a Medicaid bed. Not only must your resources and income be within limits, you must also have a place to utilize the Medicaid benefit once it is awarded. While long term care nursing home beds are generally available if you have Medicaid, assisted living beds are generally available only with an assisted living “spend down.” This second definition of the term “spend down” can be confusing. What the assisted living facilities mean by “spend down” is how many months of private pay they expect you to make before they will accept the Medicaid rate, which is considerably below the private pay rate.

Once an applicant is in a Medicaid facility and has been approved for long term care they must pay the facility an amount up to their income level minus a small personal care allowance. Medicaid then pays the facility the difference up to the Medicaid negotiated rate. If the applicant’s income exceeds this negotiated rate, their excess income is deposited into an income trust account. which eventually goes to Medicaid.

More about Dick Dorrough, Certified Medicaid Planner and Chief Benefits Consultant
In 2010, Dick Dorrough founded War Veterans Association of Colorado to assist veterans and their families in locating crisis funding for long term care. In the same year, he achieved his FINRA designation of Certified Medicaid Planner. In 2015, Dick started Medicaid for Colorado to assist families in planning for Colorado Long Term Care Medicaid. Dick can be reached at 303-829-0205.

Posted March 2018 on