Understanding Medicaid Spend Down

What Is Medicaid Spend Down and Why Does It Matter?

Medicaid spend down is a financial strategy used to help individuals qualify for Medicaid when their income or assets exceed the eligibility limits. For grieving spouses managing funeral arrangements and end-of-life logistics, understanding spend down rules can ensure access to the benefits their loved one needs
while protecting
family assets.

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Can You Spend Down for Funeral Costs?

Yes. Medicaid allows spend down for irrevocable funeral arrangements. Work with a funeral director who understands the rules and can help structure the plan correctly.

How Medicaid Spend Down Impacts Funeral Planning

Many don’t realize that prepaid funeral expenses can be part of a strategic Medicaid spend down. By working with a trusted funeral home to prepay and document services, families can convert countable assets into exempt ones. This means honoring a spouse’s wishes without jeopardizing benefit eligibility.

What Counts as an Allowable Spend Down Expense?

To meet Medicaid requirements, funds must be spent on approved goods or services. These can include:

  • Prepaid funeral and burial plans (irrevocable only)
  • Medical expenses and health insurance premiums
  • Home modifications for accessibility
  • Personal care services or home health assistance

How to Use a Funeral Trust to Protect Assets

One of the most effective tools is an irrevocable funeral trust (IFT). These trusts allow you to set aside funds specifically for funeral and cremation expenses. Medicaid exempts IFTs from asset calculations, giving grieving families peace of mind during a difficult time.

Frequently Asked Questions

What is considered a countable asset under Medicaid?

Countable assets may include checking/savings accounts, investment accounts, certain life insurance policies, and more. However, irrevocable funeral trusts are not counted.

Can funeral preplanning really protect my spouse's Medicaid eligibility?

Yes. If structured properly, prepaid funeral plans can reduce countable assets and help meet Medicaid eligibility thresholds.

How much can I set aside in a funeral trust?

Limits vary by state, but in Ohio and Kentucky, up to $15,000 is typically exempt when placed in a Medicaid-compliant funeral trust.

What if my spouse is already in a care facility? Is it too late?

No. You may still be able to prepay for funeral services if assets remain. This should be done before Medicaid approval, so time is of the essence.

Let Us Help You Plan With Confidence

At Fares J. Radel Funeral Homes, we’re here to ease your burden. Our caring team helps families in Northern Kentucky and Ohio navigate Medicaid planning with compassion and clarity. We’ll walk you through preplanning options that protect your assets and honor your spouse’s legacy.
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