Given the rising costs of care for seniors, it\u2019s no surprise so many Americans are turning to government assistance programs like Medicaid<\/a> for help. While Medicaid is extremely useful for covering nursing home costs, the program has very strict income and asset restrictions<\/a>. Furthermore, state Medicaid programs heavily scrutinize purchases and asset transfers in the years preceding an application for Medicaid, so you have to be very careful in the years leading up to your application for benefits.<\/p>\n If you are contemplating applying for Medicaid or ALTCS<\/a> in the next five years, it\u2019s important you have a spend down plan to ensure you meet the qualification standards without risking ineligibility or transfer penalties.<\/p>\n Before you\u2019re eligible for Medicaid benefits, you\u2019ll need to \u201cspend down\u201d your assets to the point that you have a demonstrable need for government assistance. However, Medicaid imposes strict rules on what you can and cannot spend assets on in the process of spending down. Failure to heed these rules may result in disqualification for program benefits.<\/p>\n Some popular examples of exempt assets and services that you can pay for in the process of spending down assets for Medicaid include:<\/p>\n Note that gifts and donations are not included on this list. To prevent seniors from gifting assets to family members or trusts in order to avoid spending down assets, Medicaid programs don\u2019t allow gifting non-exempt assets within five years of applying for Medicaid. Breaking the gifting rule results in a transfer penalty, a period of time during which you cannot apply for Medicaid benefits.<\/p>\n There are only four exceptions when it comes to gifting for Medicaid spend down:<\/p>\n Given the implications of improperly using or transferring assets, it\u2019s important to meet with an experienced financial planner to create a spend down plan for Medicaid benefits. If you have substantial assets or a complex estate plan that requires gifting (notably gifting to minimize estate taxes), you should also discuss your plans with an experienced attorney.<\/p>\n This question is often accompanied by another one \u2014 does Medicaid actually check your bank account? The short answer is no, the case worker usually won\u2019t check your bank account balance. However, in the long run, rest assured that any assets you fail to properly disclose to Medicaid will come to their attention.<\/p>\n How? For starters, Medicaid employs a strict audit system with supervisors who check your application and documents. Should a supervisor come across any red flags, they\u2019ll launch a full audit to ensure you\u2019re not defrauding the government.<\/p>\n Second, all financial institutions (including your local bank) report account information to the IRS and state revenue departments. The government may not move very swiftly and have difficulties when it comes to inter-agency cooperation, but at some point your undisclosed bank account will catch someone\u2019s eye.\u00a0<\/span><\/p>\n When applying for Medicaid benefits, the state Medicaid agency is primarily concerned with your liquid assets (property that can quickly be turned to cash). In determining your eligibility, the agency considers the following countable (non-exempt) assets:<\/p>\n While determining your countable assets for Medicaid is certainly a nitpicky process, there are a number of exempt assets that you don\u2019t need to worry about. These include:<\/p>\n Note that in case of primary home, there may be a limit on the home equity value. If the applicant or the applicant\u2019s spouse doesn\u2019t currently live at home, the value cannot exceed $688,000. However, as long as the applicant\u2019s spouse lives at home, there is no equity limit.<\/p>\n The income and asset restrictions for Medicaid are s. Unfortunately, if your asset value exceeds $2,000 or your income level exceeds the state limit, your application will be denied. Your only option is to spend down your assets and manipulate your income (lawfully) until you qualify.<\/p>\n There are online guides for creating a spend down plan, but this isn\u2019t something you should attempt on your own. Even the simplest mistake can result in a transfer penalty that renders you ineligible for benefits for a period of time \u2014 even if you legitimately run out of assets during the penalty period.<\/p>\n In Arizona, the medicaid program is referred to as ALTCS (Arizona Long-Term Care System). The ALTCS benefit has\u00a0strict financial and medical eligibility requirements<\/a>, as the benefit is intended to be used to help families afford costly medical and long-term care bills. While it is possible to apply on your own, it is highly recommended that you work with a long-term care professional in order to navigate this complex system.\u00a0The experienced elder law team<\/a> at JacksonWhite can make the process of long-term care easier for Arizona families.<\/p>\nMedicaid Spend Down Rules and Gifting<\/h2>\n
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How Much Money Can You Have in the Bank to Qualify for Medicaid?<\/h2>\n
Medicaid Spend Down Exemptions<\/h2>\n
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How to Qualify for Medicaid if You Have Assets<\/h2>\n
Get Help With Your Arizona Medicaid (ALTCS) Needs<\/h2>\n