The Alzheimer's Digest: "Spending Down" to Medicaid: One Caregiver's Personal Journey

Saturday, July 20, 2013

"Spending Down" to Medicaid: One Caregiver's Personal Journey

My uncle called me one day and said "Your aunt just got lost again and I can't take it anymore." Thus began my experience with the complexity of Medicaid (Title 19 of the federal Social Security Act), designed to provide medical assistance to those individuals who have minimal assets and inadequate income of their own. Some people have too much income and/or assets to qualify, so they must "spend down" or use up their own money to reach the eligibility levels.

Although I had been a financial planner and advisor for years, I had not come in contact with the Medicaid program personally or through clients, just through reading and seminars. I had learned that planning before acting is VERY important and that eligibility requirements vary by state. Those who specialize in this area, elder law attorneys, medical social workers, and state-employed case workers are your greatest resource to avoid delays and avoid creating periods of ineligibility requiring re-certification. They can keep you from running afoul of the more stringent divestiture rules, including a five-year look-back at transfers/gifts of assets, contained in the Deficit Reduction Act of 2005 passed by congress.

So uncle and I met with an elder law attorney to help map out a game plan. Self reliance and frugality (depression-era traits) had allowed uncle and auntie to save a little nest egg, but it wasn't going to last long at the cost of the care she required…and what about him? The attorney reviewed both the asset and income Medicaid requirements for our state.