How Does Medicaid Spend-Down for the Nursing Home Work in Louisiana?
The term spend-down is a term commonly used to describe what occurs when someone who resides in a nursing home does not qualify for Medicaid because they exceed the allowed asset amount (too much money, land, etc.). By paying for the nursing home out of pocket each month, the excess assets are spent-down to the amount allowed by Medicaid. Unfortunately going through a full spend-down results in depleting countable assets down to $2,000. In my experience most families prefer an approach to put the Medicaid recipient (and their spouse, if applicable) in a better financial position to endure this life changing event.
The Louisiana Spend-Down Rules for a Single Applicant
Families typically are told by the nursing home staff that they are required to spend all of the applicant’s money on nursing home bills to qualify for Medicaid. Fortunately, there are other options available to preserve assets. The ability to avoid a full spend-down is most important for a Medicaid applicant who has a spouse at home. The rules for Medicaid spend-down in Louisiana are different for an applicant who is married versus an applicant who is single. An applicant who is single is allowed to have a maximum of $2,000 of countable assets. A common misconception is an unmarried applicant must spend-down to $2,000 to qualify for Louisiana Medicaid long-term care. As an elder law attorney, I help applicants preserve a significant amount of assets from spend-down. Even if a loved one is currently in a nursing home and spending-down their assets (or about to enter a nursing home), options are available to legally preserve significant assets.
The Louisiana Spend-Down Rules for Married Couples
The spousal spend-down rules for Louisiana Medicaid long-term care provide an additional exemption for the spouse at home. This additional exemption is called the Community Spouse Resource Allowance. In 2019, the Community Spouse Resource Allowance is $126,420. Assets in the name of the spouse at home (the community spouse) qualify for the Community Spouse Resource Allowance. In a nutshell, a Louisiana Medicaid applicant with a spouse at home has a total exemption from spend-down of $128,420 ($2,000 plus $126,420). If the couple’s countable assets exceed this amount, they are typically advised to spend-down to this level. That is a pretty grim financial picture for the spouse at home who may live many years with very limited financial resources. Again, this is where seeking the advice of a qualified elder law attorney is critical. Married couples have additional options available to avoid spending-down their assets. I help individuals and couples with assets exceeding the Medicaid limit legally and ethically qualify for Louisiana Medicaid using the rules allowed by Medicaid. These strategies do not involve the five-year look-back for transfers. Alternate strategies are used when planning is done in advance of a long-term care need.
Should You Hire a Lawyer if You are Spending-Down?
A word of caution! Do not attempt to avoid Medicaid spend-down by giving away assets. A gifting strategy should only be implemented with the guidance of a qualified elder law attorney. An ill-advised gift (donation) could result in disqualifying the applicant from Louisiana Medicaid for years. In addition, do not attempt to hide assets to qualify for Medicaid as this would be fraud.
The bottom line… many strategies are available to legally avoid Louisiana Medicaid spend-down; however, the advice of a qualified elder law attorney is a must. A qualified elder law attorney knows the ins and outs of the complex maze of state and federal Medicaid rules and can help protect assets from spend-down. To learn more about your options to avoid spend-down, contact me at 985-580-2520. I can provide planning options that are available to your situation so you can make the best decision for your family.
If you have questions about avoiding spend-down or Medicaid qualification in Louisiana, contact estate and elder law attorney and Certified Financial Planner, John Sirois at 985-580-2520 or by email. You can also find more information about retirement and estate planning in John’s book, Louisiana Retirement and Estate Planning, available by contacting John or through Amazon.com.