If you have too many assets to qualify for Medicaid, a spend-down can help — but it must be done legally. Here's how it works.
What is a Medicaid spend-down?
A Medicaid spend-down is the process of reducing your countable assets down to your state's limit — usually around $2,000 for an individual — so you become financially eligible for Medicaid nursing home coverage. Crucially, spend-down means spending on permitted things, not giving money away. Allowed uses include paying for care and medical bills, paying off a mortgage or other debts, making home repairs or modifications, buying a more reliable vehicle, prepaying funeral and burial expenses, and converting countable assets into exempt ones. Done correctly and early, a spend-down can preserve a home and protect a spouse while qualifying you for coverage. Mistakes can delay eligibility for months, so guidance matters. Call 1-800-MEDIGAP (1-800-633-4427).
How does the look-back period affect spend-down?
Medicaid's 5-year (60-month) look-back reviews asset transfers before your application. The key rule: spending down on yourself is fine, but gifting assets or selling them below market value can trigger a penalty period during which Medicaid won't pay. So paying your own bills, fixing your home, or buying exempt items is allowed; transferring money to children to 'hide' it is not — and can backfire badly. This is why spend-down should be planned early and carefully, ideally with an elder-law attorney, especially when a home or spouse is involved. The wrong move can cost months of coverage. Our specialists can point you to the right resources free of charge. Call 1-800-MEDIGAP (1-800-633-4427).