Tuesday, June 25, 2013

'Spending Down' to Medicaid: Three Easy Tips

Medicaid financial qualifications differ from state to state.  Some states have an income limit; some have an asset limit; and others, like Washington State, have both. If your aging parent needs care, or will in the near future, and funds are low, your first step is to do an online search on "Medicaid qualifications (your state)."

Once you have your state-specific numbers, you can begin to help your parent spend money on Medicaid-allowable expenses. The process is called a "spend down."  Here are some ideas (I'm assuming you have financial power of attorney.)

1.  Spend for your parent's future needs.  If  your parent could use a new television, an easy chair, or some new clothes, now is the time to go shopping.  Once he or she is on Medicaid,  the money will be gone. If it's hard to anticipate future clothing needs today, you can purchase gift cards for use later.  Within reason, you can buy gift cards in small amounts to use for relatives' birthday gifts, going out to dinner, etc.

2.  Plan for your parent's passing.  Most states allow people to purchase burial plots. Many states permit people to buy prepaid funeral plans or funeral trusts.  Check with your local funeral provider to see what type of plan is allowable and how much money your parent can spend and still comply with Medicaid rules in your state.

3. Purchase a small life insurance policy in your parent's name.  Most states allow policies of about $1500 to be paid for out of the spend down funds.

These ideas are starters.  Good luck!

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