If your income or assets exceed state limits, you can still qualify for Medicaid. You do this by spending extra income on qualifying medical bills or reducing countable resources through approved purchases. This process helps offset extra resources by paying for specific medical and personal costs. Even so, tackling these financial rules requires knowing what the state counts as an asset.
Countable vs. exempt resources in Maryland
Maryland classifies your belongings as either countable or exempt resources. Countable assets include checking accounts, savings, stocks and secondary real estate. Exempt resources can include your primary home up to a specific equity value, one vehicle and personal items. You generally must have $2,500 or less in countable assets to qualify for long-term care Medicaid. However, higher asset thresholds apply to married couples under Community Spouse Resource Allowance rules.
Permissible ways to spend down excess assets
You can lower your countable resources by making proper purchases that directly benefit you. For instance, you can pay for home upgrades to improve accessibility. You can also pay off existing debts like credit cards or mortgages. Additionally, buying an irrevocable prepaid funeral and burial contract is a permissible way to reduce excess assets.
Critical pitfalls to avoid during spend-down
One common mistake involves giving assets to family members as gifts. Maryland uses a five-year look-back period to review your financial transactions. Unplanned asset gifts or selling property below fair market value during this window can trigger a penalty. This penalty can delay your Medicaid benefits for several months or even years.
How an attorney can help you succeed
Spend-down rules are complex and depend on your marital status. Working with an attorney experienced in elder law can build a plan to protect your goals. They can also help you draft caregiver agreements, set up special needs trusts and follow transfer rules.