Qualifying for Medicaid through Medicaid spend down

As Pennsylvania residents grow older, many will eventually need some type of long-term care when they are no longer able to independently care for themselves. Unfortunately, long-term care is prohibitively expensive, making it difficult for some people to receive the care they need in their golden years. Medicaid is available to pay for nursing home care, but people must income-qualify. If an individual is over the income limits for Medicaid, it is still possible to qualify through Medicaid spend down.

What is Medicaid spend down?

Medicaid spend down is a process allowed under Pennsylvania elder law through which individuals can spend down the income that exceeds the income eligibility limits for Medicaid. Individuals can submit paid or unpaid medical bills that equal or exceed the spend-down amount to qualify for Medicaid by bringing their countable income under the income eligibility limits. Medicaid has a five-year lookback period to look at transactions individuals have completed within the previous five years. The state can unwind transfers of assets to family and friends people have made to qualify for Medicaid in the future. However, transfers within the lookback period to qualify for Medicaid might still be allowed in certain cases, including unlimited transfers to a spouse, transfers to disabled or blind adult children, or transfers to children under the age of 21.

What are countable assets and income?

Countable assets and income are categories of assets and income that are counted toward the state’s income and asset limits for Medicaid purposes. Noncountable income and assets are those that won’t be counted. Nearly all types of income are counted for Medicaid purposes. There is a homestead exemption through which the individual’s home will not be counted toward the asset limit, however. The income limit for Medicaid eligibility for a single person in 2023 is $2,742. For a married couple when both spouses are applying, the limit is doubled to $5,484 per month. The asset limit is $2,000 per individual or $4,000 per married couple when both spouses are applying.

Medicaid spend down rules are complex and difficult to understand for many people. However, it is possible for individuals whose income or assets exceed the eligibility limits to qualify through utilizing this practice.