If you get a rejection for your Medicaid application, you may feel disappointment and discouragement. Do not despair. You may be able to qualify for benefits with some strategic planning.
An effective tactic to meet Medicaid qualifications is reducing the value of your assets. This strategy, known as a spend down, is possible to accomplish if you have the right help. However, making a mistake can lead to significant financial penalties. Here are some tips for undergoing a successful spend down process.
1. Start as early as possible
Medicaid has a look-back period of five years to figure out if your assets make you eligible for benefits. If you suddenly end up needing long-term care and have not been spending down, you will have difficulty qualifying for Medicaid. Start reducing your assets as soon as you can in preparation for what may come a few years down the road. As you begin spending down, start saving your bank statements too.
2. Know that certain assets are exempt
It is important to keep in mind that you do not need to sell or reduce certain assets, including the following:
- The home
- Household furnishings and goods
- Your car
- Personal effects
- Prepaid burial or funeral arrangements
A certain amount of cash may also be exempt, but the exact amount depends on whether you are single or married.
3. Get legal help
It can be a complicated process to spend down your assets to adhere to Medicaid rules. You will need to know the complex ins and outs of state and federal laws. If you try to do it all by yourself, you may reduce your resources more than necessary or garner penalties. When spending down for Medicaid, you should get help from an estate planning and elder law attorney.