Medicaid Spend Down
By Kim Boyer
What is a spend down? This is the amount by which a Medicaid applicant’s allowable resources must be reduced before eligibility can be obtained. The concept applies to both married and single applicants, although there are additional methods of spend down for married applicants.
Basic Spend Down for Married or Single Applicants
It is advisable for any individual expecting a long-term nursing home stay to spend funds on a thorough dental examination and dental work, procuring glasses and other hardware that may be unavailable through Medicaid, purchasing orthopedic shoes, and generally attending to any health care needs that may be unmet from government benefits.
Expenditures can also be made on items that will improve the quality of life for the resident. Examples include purchase of a television, VCR, stereo, computer, books, subscriptions, toiletries, or clothing.
Expenditures can also be made to pay off debts, although a closer evaluation may be prudent depending on the type of debt.
You can also purchase a burial plot, casket, and marker or set up a burial account of $1,500. If you are entering into a pre-need contract, you want to make sure that the contract only includes items that are acceptable for Medicaid purposes. Consider working with someone specifically knowledgeable about Medicaid to ensure the contract is appropriate for Medicaid purposes.
Spend Down for Married Couples
Spouses are entitled to keep the Community Spouse Resource Allowance “CSRA”, which increases each year. In some cases, it may make sense to obtain an equal division of assets to increase the amount of the CSRA.
Exempt property is not counted in determining resources for either spouse for purposes of eligibility. A key concept in spending down to eligibility levels is the conversion of non-exempt resources into exempt resources. This may include:
- Purchasing a new residence
- Paying down debt on the primary residence
- Making necessary repairs and improvements to the home
- Purchasing a better vehicle for the spouse
- Purchasing life insurance that does not have cash value
The timing of the spend down may be critical. Expenditures made before the first institutionalization will reduce the total available resources. That, in turn, could reduce the amount the community spouse is permitted to retain as the Community Spouse Resource Allowance.
Funds for a Medicaid spend down should benefit the applicant or the applicant’s spouse. If funds are gifted or used to benefit someone else, this is considered a transfer of assets (with a few exceptions) and creates an ineligibility period.
Finally, funds can be used to pay for the long-term care as part of the spend down. It is a good idea to put together a plan that incorporates your goals, as well as creating or updating your estate plan, including powers of attorney for health care and finances.
Disclaimer: Information provided as a service of Kim Boyer, Certified Elder Law Attorney, updated as of 07/16/25. It does not constitute legal advice. For specific questions you should consult a qualified attorney.
