What is Medicaid Spend-Down and What Expenditures are Exempt in Kentucky?

In Kentucky, Medicaid applicants must have less than $2,000 in assets (also called “resources”) to qualify for long term care assistance. With the average nursing home facility charging upwards of $6,000 a month, many applicants are above the resource limit, but still do not have enough assets to pay for long- term care. You may be wondering how to dispose of the assets that disqualify you or your loved one from Medicaid. It’s an odd problem to have, but spending a little money in the right ways can save you thousands in nursing home costs in the long run.

When beginning the application process, the first step is to perform a resource assessment to determine how much money the applicant will need to “spend down” before he or she qualifies for Medicaid. Once this number is determined, the applicant can decide if spending down is the appropriate method for his or her situation. If so, the applicant can spend down the excess assets by making exempt expenditures. If an expenditure is “exempt,” the Medicaid applicant won’t be penalized for spending the money and the purchased item will not count as a “resource” for Medicaid purposes.

Medicaid labels several types of expenditures as exempt. For instance, if the applicant owns a home, he or she may be able to make needed repairs or modifications to improve accessibility. Additionally, the applicant may prepay funeral and burial costs up to a certain limit. Other exempt items include properly structured annuities and life care agreements, and medical care and devices that are not covered by Medicaid, such as glasses or dentures. An applicant may even be able to purchase personal items like clothes, furniture, and electronics that will make them more comfortable during their long-term care stay.

It is important to use these exemptions carefully so as not to risk your or your loved one’s Medicaid eligibility. If you would like to learn more about the Medicaid spend down, please contact Holly Homra at 270-450-8253.