What Medicaid Spin Down Is And How It Works
Medicaid is the Title 19 sector of the Federal Social Security Act. The term 'spin down' or 'spend down' is the act of reducing ones assets in order to qualify for medical-financial assistance for those whose social security entitlement lies at the low-income end of the spectrum.
The enactment of The Deficit Reduction Act of 2005 was designed to protect the overall Medicaid Program from being abused or fraudulently used by financially affluent people to hid, transfer or exempt assets from being used to determine eligibility for Medicaid.
Basically Allowable Spin Downs
One's home is exempt as long as the applicant resides there. A some point in time, if the applicant enters a nursing home, if the spouse and children continue to reside in the home, the exemption continues to apply, even adult children are considered under this rule. The family vehicle is exempt and in some cases 2 vehicles may be exempt for example if the second vehicle is a 4 wheel drive and the first is not. Prepaid funeral and burial plans as well as up to $1500 of the face value of life insurance are acceptable as non-countable assets. Cash or assets in checking or savings accounts of $2000 for one person or $3000-4000 for a married couple are not counted for spin down. In some states an Irrevocable Trust Account is not counted since the assets have been legally transferred to another person and no longer legally considered to no longer belong to the grantor.