What Does “Spend Down to Medicaid” Mean?
“Spending down” refers to using your excess assets in approved, meaningful ways until you reach your state’s financial eligibility limits for Medicaid long-term care. This is the time to secure your future!
In Oregon, for example, an individual must generally have no more than $2,000–$3,000 in countable assets to qualify. Anything above that requires careful planning to reduce responsibility at Embrace Age Prepared we help lay out your care and housing options first.
What Counts as an Asset?
Countable assets include:
- Cash, checking, and savings accounts
- CDs, stocks, bonds, mutual funds
- Retirement accounts (IRAs, 401(k)s)
- Real estate beyond your primary home or in the case your care needs extend beyond what in-home care can provide; the sale of your home as well.
- Vehicles beyond your primary one
- Life insurance policies with cash value
- Secondary or vacation properties
Exempt assets (typically not counted):
- Your primary residence (in most cases). If funds are depleted and advanced care is needed, then the sale of the home would be considered part of the spend-down process.
- One vehicle
- Household goods and personal items
- Limited burial funds or pre-paid funeral plans
How to Spend Down
You can’t gift money or transfer assets to others—that triggers penalties. Instead, Medicaid allows “approved spending” on items or services that directly benefit the applicant, such as:
- Paying for facility care before approval: With less than 10% of beds available for direct Medicaid placement, relocating to an Assisted Living facility during the early part of the spend down can help ensure care for a lifetime.
- Paying for limited hours of in-home care services
- Medical and dental expenses
- Mobility aids and durable medical equipment
- Health insurance premiums and prescriptions
- Prepaying for funeral or burial expenses
Medicaid also reviews your past five years of financial history (the “look-back period”) to ensure assets weren’t given away or transferred below market value.
Countdown to Medicaid: Spend Down Preparation Checklist
36–24 Months Before Assets Are Depleted:
Call Embrace Age Prepared. Don’t wait! This is your critical planning window. You need to know what you don’t, and we can help provide you with a strategy that can help you maximize your funds, identify appropriate care options, and structure your finances in a way that protects your choice and dignity. The longer you wait, the fewer options you have to select your choice of care for the future.
12–6 Months Before:
Call and Advisor today! We have to move fast!!! Start documenting all expenses and gathering financial records (bank statements, income proofs, insurance policies, property details). Call to schedule an appointment with your local DHS or ADRC to start your Medicaid assessment.
6 Months–Now:
Time is ticking!! Medicaid planning should be in full motion. Finalize your asset documentation, confirm eligibility, and ensure all spend-down actions are within state guidelines.