What is a Medicaid spend-down plan?

A Medicaid spend-down plan is a strategy used by individuals in Florida to become eligible for Medicaid coverage even with too much income or too many assets under the usual rules. Normally, to be eligible for Medicaid, an individual must not have more than $2,000 in countable assets or a certain amount of income that varies based on the type of Medicaid coverage. However, if an individual has too much income or assets to qualify, they may be able to use a Medicaid spend-down plan. A spend-down plan works by having the individual contribute a certain amount of income or assets toward their medical costs or long term care services. For example, if an individual has $4,000 over the asset limit, they can spend $2,000 of that amount on medical services. This reduces their countable assets to the $2,000 limit and the individual can then qualify for Medicaid. In addition to the spend-down option, people in Florida can also use a Medicaid qualifying trust or a Miller trust, also known as an Irrevocable Income Trust. These trusts are sometimes referred to as “Medicaid Planning trusts” and allow individuals to set aside assets in a trust in order to become eligible for Medicaid. The rules for Medicaid eligibility vary depending on individual circumstances and can be complex. It is best to discuss your individual situation with a qualified Elder Law professional who can give you specific advice on the best options for you.

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What is a Medicaid spend-down plan?

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