Understanding Spend-Down: What Counts, What Doesn’t

As long-term care expenses—particularly for nursing homes—begin to add up, many Michigan families look to Medicaid for assistance. However, Medicaid eligibility is tied to strict income and asset limits in the state.

This is where the spend-down process becomes essential.

Spend-down involves spending or rearranging specific assets to meet the financial requirements for Medicaid qualification. While the regulations can be complicated and errors may be costly, the proper guidance can help you protect both your care and your savings.

What Are “Countable Assets”?

When assessing Medicaid eligibility, most of your financial resources are considered, such as:

• Checking and savings accounts
• Certificates of deposit (CDs), stocks, and bonds
• Retirement accounts like IRAs or 401(k)s
• Cash value in life insurance policies
• Additional real estate or vehicles

However, some assets may not be counted. For instance:

• Your primary home is often exempt (up to a specific equity limit)
• One vehicle is typically excluded
• Prepaid funeral arrangements may also be protected

Understanding which assets are counted—and which are not—can significantly impact how quickly and smoothly you qualify for Medicaid.

Why This Matters for Your Family

Many families believe they must “spend everything down to nothing” before qualifying for Medicaid, but that’s simply not the case. With proper planning, it’s often possible to:

• Qualify for benefits sooner
• Preserve essential assets such as your home or retirement funds
• Avoid penalties that can arise from well-intentioned mistakes, like gifting money or transferring property too late

Let’s Make a Plan That Works for You

Spend-down strategies aren’t universal; each family’s circumstances are unique, and Medicaid rules are continually changing. Whether you’re preparing in advance or already facing long-term care decisions, we’re here to help you explore and understand the options available to you.