What is Connecticut’s Medicaid Asset Spend-Down Option?

If you are among the high percentage of older adults who ultimately need long-term care — about 70 percent of people aged 65 and up will need some form of long-term care, according to the Administration for Community Living (ACL) — you will need a way to pay for it. The ACL and Administration on Aging (AOA) clarify that about 20 percent of the older adults who do need long-term care will need it for five years or longer, and women tend to require long-term care for longer periods than men do, on average. Given the extremely high costs of nursing home care, as well as care in an assisted-living facility, it is often essential for Connecticut residents to have Medicaid pay for long-term care.

Given that Medicaid is a program for individuals with limited assets, you might be thinking it does not apply to you. However, unless you are among some of the most high net worth individuals in Connecticut, you will likely want to become eligible for Medicaid for long-term care purposes. That will require either spending down or engaging in Medicaid and asset protection planning with a lawyer. Below, we can tell you more about a potential option for “spending down” if you need Medicaid coverage for long-term care in the near future.

What Does Spending Down?

There is a five-year look back period in Connecticut for Medicaid eligibility. Within that period — looking back from the date you require long-term care and Medicaid coverage — you cannot gift any assets, or else you can be penalized. In addition, you will need to “spend down” so that you do not have more assets than what makes a person eligible for Medicaid.

The specific amounts vary depending on your marital status, the type of long-term care you need, and which of your assets are countable versus non-countable.

Spending Down on Non-Countable Assets

In order to spend down to become eligible for Medicaid, you (or your elderly parent) may not need to spend down on payments for long-term care. It may be possible to spend down your countable assets on non-countable assets so that the “spent down” funds remain with you, but will not need to be used to pay for long-term care before you become eligible for Medicaid.

What assets are countable and which are not? Countable assets include cash, investments, bank accounts, real estate (other than your primary residence), and almost any form of income you are receiving, including wages, pension payments, dividends, and Social Security income. Assets that are not countable — and on which you can invest your countable assets to “spend down” — include, for example, your primary residence if you plan to return, your personal belongings, your automobile, a burial plot, and term life insurance. To “spend down” you may be able to pay for necessary modifications to your primary residence, pay for funeral and burial expenses, or pay off debt.

Contact a Connecticut Elder Law and Asset Protection Attorney for Assistance

Medicaid planning is an important component of estate planning for most adults in Connecticut, whether you are in your 40s or 50s and just beginning to think about older age, or you are already retired and may soon need long-term care. Our firm has years of experience helping middle-aged families engage in Medicaid planning and other asset protection strategies, as well as helping adult children with their elderly parents’ Medicaid planning needs. An experienced Canton elder law and asset protection lawyer at the Law Office of Brian S. Karpe can speak with you today. Contact us for more information.

Sources:

medicaidplanningassistance.org/medicaid-eligibility-connecticut/

acl.gov/ltc/basic-needs/how-much-care-will-you-need