What is a Medicaid income spend down plan?

On Behalf of | May 25, 2021 | Estate Planning |

When you consider the needs of you or your loved ones, elderly or otherwise, Medicaid may come up as an option. But it has its pros and cons

Medicaid, unlike Medicare, has benefits for nursing home and personal care costs. This makes it a useful tool to evaluate while going through the process of a Pennsylvania estate plan. But they also have certain requirements.

Medicaid income limits

If you or your loved one’s income is too high, you may not qualify for Medicaid. According to Benefits.gov, the Pennsylvania Medicaid limits range depends on the household size in question.

If your loved one lives alone, their maximum income level is $17,131 per year to qualify for Medicaid. This limit raises to $23,169 for two people. The table goes all the way up to a household size of eight with a maximum income level of $59,398.

Spend down plans

If you or your loved one make more than the annual limit, there are ways to get under that limit by spending on eligible expenses.

Given the example of a single resident household, your loved one could bring in 1,427 and still qualify. If they make $1800 per month from their work or social security, they would not. But by showing that they spend $400 on medical debt every month, that would bring their monthly income to $1400 and would therefore qualify.

These spend down plans may get complicated depending on the exact circumstances of your elderly loved one’s life. But with the right organization and pre-planning, your loved one might gain access to a wealth of Medicaid benefits even if they do not meet the income limits at first glance.

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