Reducing Assets to Meet Medicaid Eligibility
Medically Needy Pathway – Income Too High
Seniors aged 65 and over who exceed the Medicaid income limits may become eligible by using the money that exceeds the income limits to pay off medical bills. They can use the extra income to pay off insurance premiums, hospital or physician office visits, and prescription drugs. The amount eligible for reduction over six months varies per geographic area. Consult with the Department of Social Services in your area to discuss your options.
Asset Spend Down
An asset spend-down approach can help individuals become eligible, as well. With asset spend-down, the applicant may make modifications or sell the property at fair market value to come within asset value limits.
If you plan to apply for Medicaid, record the price received for items sold within five years before applying. If possible, keep a copy of the asking prices of similar items sold in your geographic area for big-ticket items to prove to Medicaid that you sold the item at fair market value. Doing so gives you a ready defense if questioned about trying to fraudulently reduce income levels. If you violate the fair market selling rules during the five-year look-back period, Medicaid can impose a Penalty on you that prohibits you from applying for Medicaid for five years.
Care Agreement Validate Spend-Down Actions
A Care Agreement validates an applicant’s actions during Medicaid’s review of the Five-Year Look Back period. If you pay someone regularly to care for your family member, you might risk jeopardizing your ability to obtain Medicaid assistance without it. If you can’t prove that someone works for you, Medicaid may believe you give them money to save for another day.
On the other hand, Medicaid may wonder if the payments are gifts. If so, the payment would violate the 5-year look-back rule. However, if you have a personal care agreement in place, it legitimizes payments made to the individual. It proves the payment was for services requested in advance, whereas, with a verbal agreement, there is no proof.
Applying for Medicaid
There are several ways to apply.
- Apply online at CommonHelp.
- By calling Cover Virginia’s Call Center at 855-242-8282
- On paper using Application for Health Coverage & Help Paying Costs
- Contacting the local Department of Social Services