Qualifying for Medicaid coverage requires you to meet several requirements. One of these is to have an income or assets that are under a set threshold.
For those who do not meet this threshold, it is possible to “spend down” or reduce their income and assets to become eligible. Some information about the spend-down process is found here.
Who needs a spend down?
Anyone with too much income or assets to qualify for Medicaid will likely need a spend down. Seniors who need long-term care or those with disabilities are the most likely to need this. For New Jersey, a single individual must have income under $2,742 per month and assets under $2,000. If these numbers are exceeded, the spend-down process is necessary.
How does a spend down work?
The mechanics of a Medicaid spend down vary based on whether you’re reducing income or assets. For income-based spend downs, individuals can use excess income to pay for medical bills, prescription drugs or health insurance premiums until they reach the Medicaid eligibility line.
For assets, options include spending on home modifications for disability, prepaid funeral expenses or purchasing an annuity that turns countable assets into an income stream to spend down (as mentioned).
Navigating Medicaid spend down rules can be complex. Incorrectly spending down assets may result in a period of Medicaid ineligibility. Because of this, seeking help is advised. A legally sound spend down strategy can expedite Medicaid approval and protect an applicant’s financial well-being.
Knowing your rights and options to become eligible for Medicaid benefits is necessary for many people. The information here will help you understand the spend down option and how it works.