Define: Spend Down

A spend down refers to the process of reducing one’s assets or income to meet the eligibility requirements for certain government assistance programs, such as Medicaid.

Individuals who have assets or income that exceed the eligibility limits for government assistance programs may be required to do a spend down.

Assets that are typically included in a spend down can vary depending on the specific program, but they may include cash, bank accounts, real estate, vehicles, and investments.

During a spend down, individuals must use their excess assets or income to pay for their medical or long-term care expenses until they reach the eligibility threshold for the government assistance program.

Transferring assets to others, such as family members, with the intention of avoiding a spend down is generally not allowed and may result in penalties or disqualification from government assistance programs.

Certain assets or expenses may be exempt or excluded from the spend down calculation, depending on the specific program and state laws. It is important to consult with an attorney or a qualified professional to understand the applicable exemptions.

The duration of a spend down can vary depending on the individual’s financial situation and the specific program’s eligibility requirements. It may last for a few months or several years.

The spend down funds must be used for medical or long-term care expenses that are not covered by insurance or other assistance programs. Using the funds for other purposes may result in disqualification from government assistance.

Yes, it is advisable to consult with an attorney who specializes in elder law or government benefits to navigate the complexities of the spend down process and ensure compliance with the applicable laws and regulations.

Once the spend down is completed and the individual meets the eligibility requirements, they can apply for the government assistance program and receive the benefits they qualify for based on their remaining assets and income.