Elder & Disability Law Office, Ltd., John Belconis
350 South Northwest Highway, Suite 300
Park Ridge, IL 60068                
(847) 430-3652 

Medicaid Spend Down Exempt Asset List Legal Size

There is a great deal of confusion regarding the spend-down of assets for Medicaid qualification for long term care. As of the year 2016 generally a single or widowed individual in Illinois can only keep about $2,000 in countable assets. They may find themselves wondering what the rest of their money can be spent on without causing any Medicaid disqualification.

Similarly, for a married couple, the rules are even more complex. The at community spouse (i.e. the spouse living at home) can keep the exempt assets listed below and the resident spouse (i.e., the spouse in the nursing home) may be able to transfer up to $109,560 in assets to the at home spouse. Depending upon the couples assets the couple may have account funds that need to be spent before the nursing home spouse qualifies for Medicaid.

That is often where the confusion begins. That’s because there is so much misinformation about what kinds of things the money can be spent for. For that reason, we have put together the following checklist to help people better understand the law . . . and where the money can legally be spent.

For someone who is pursuing Medicaid eligibility, the following are the types of spend-down items, in no particular order, which should be considered:

Purchase prepaid funeral plans. You should deal with a funeral home knowledgeable in this type of planning.

Purchase a new car. It is perfectly acceptable for the community spouse to purchase a new car. The community spouse may even do this and have the entire purchase price come out of the nursing home spouse’s spend-down.

Payment of nursing home expenses. Of course, nursing home expenses and other healthcare costs can be paid as part of a spend-down.

Purchase of a new home. Since the home is an exempt asset, in some instances purchase of a new home makes sense from a Medicaid planning standpoint.

Make home improvements. Home improvements may be an excellent use of funds. For instance, the community spouse might fix the roof, get a new air conditioner system, new carpeting, new furniture, etc. The intention here is to fix the house up so that, hopefully, no other home repairs will need to be made during the lifetime of either spouse. That is especially important since, in many cases, the community spouse may have to spend down a significant amount of his or her assets and may no longer have the resources necessary for large lump-sum expenditures which may occur later.

Buy household goods or personal effects. Once again the intention is to have the community spouse get the types of things which are needed to keep the household running without major expenditures down the road.

Debt repayment. Repayment debt may be a great way to reduce assets amounts before the Medicaid spend down begins.

Vacation. This can be a good idea for the community spouse at a time when there has been a long struggle to keep a loved one at home. The community spouse may be exhausted and a well-deserved vacation could be rejuvenating. Believe it or not, the entire cost of that vacation can come out before the Medicaid spend down begins.

These are of course not the only appropriate items for a spend-down. There are other expenses which would also qualify. The main rule to keep in mind is that whatever goods or services are purchased must be done at fair market value.

Also, don’t let anyone tell you that anything spent must be done solely for the benefit of the nursing home spouse. On the contrary, virtually anything that benefits the community spouse will also benefit the nursing home spouse.

Disclaimer-This newsletter does not constitute legal advice. This information is provided for educational and informational purposes only. Nothing is meant or intended to create an attorney client relationship. For specific legal advice relating to your situation contact a competent elder law attorney in your jurisdiction.