Spending Down Assets to Qualify for Medicaid

In order to be eligible for Medicaid, applicants must have no more than $2,000 in "countable" assets (the dollar figure may be slightly more, depending on the state). Applicants for Medicaid and their spouses may protect savings by spending them on non-countable assets. The following are examples of such expenditures:

• prepaying funeral expenses
• paying off a mortgage
• making repairs to a home
• replacing an old automobile
• updating home furnishings
• paying for more care at home
• buying a new home

In the case of married couples, it is often important that any spend-down steps be taken only after the unhealthy spouse moves to a nursing home if this would affect the community spouse's resource allowance.