Ohio Medicaid Spend-Down Purchases: What Purchases are Allowable?

In Ohio, Medicaid spend down purchases are a common way to reduce assets when they are too high to qualify for Medicaid. Ohio Medicaid planning with an experienced and knowledgeable Ohio elder law lawyer can avoid the need for spend-down purchases.

Unfortunately, not everyone plans ahead for the possibility that they will need to qualify for Medicaid to pay for nursing home expenses or in-home care. This leaves many people with a need to spend their assets in order to qualify for Medicaid because Ohio Medicaid limits the total amount of assets an applicant can have. Any assets above that amount can disqualify the applicant for a number of months equal to the value of the excess assets divided by the average cost of a nursing home in Ohio.

Some people make the mistake of giving away assets in order to qualify, intending to ensure that their heirs receive the assets rather than Medicaid. Unfortunately for these folks, Medicaid looks at an applicant’s assets over the five years prior to applying for Medicaid. Any assets given away or improperly transferred during that time can count against the applicant just as if they had hung on to them.

The better way to handle assets when the need for Medicaid is imminent but assets are too many to qualify for Ohio Medicaid is to spend down the assets on purchases. This is far less desirable than the options that would have been possible if proper Ohio Medicaid planning had been done with an Ohio elder law lawyer, but it is a solution.

Qualifying Ohio Medicaid Spend Down Purchases

To qualify for Ohio Medicaid, spend-down purchases must be solely for the benefit of the applicant, his/her spouse, or dependent children and not for any other people. Anything bought for adult children, other relatives, or people outside of the family will be considered an improper transfer and will count against the applicant’s eligibility.

When qualifying for Ohio Medicaid, planning your spend-down purchases is important and getting the counsel of an Ohio elder law lawyer is essential. An attorney can guide you toward purchases that can rapidly decrease your assets without endangering your Medicaid eligibility.

Two of the most common purchases for Ohio Medicaid spend down are burial contracts and home repairs/improvements. Burial contracts include pre-purchase of cemetery lot, tombstone, funeral costs, and other burial expenses. Purchasing burial contracts is also the only exception to the rule that purchases can’t be made for anyone other than the applicant and his or her dependents. Burial contracts of up to $10,000 per person can be bought for anyone in the immediate family regardless of whether they are a dependent.

Home repairs and improvements are another popular way to spend assets prior to Medicaid application. Lots of money can be spent on home repairs and improvements. However, there are two important rules to remember about this strategy:

  1. The applicant’s spouse must be staying in the house after the applicant moves into the nursing home. Otherwise, the increased value of the house will count against the applicant’s eligibility.
  2. The home must be owned by the applicant and/or his/her spouse. If the house is owned by a trust or someone else, the expense will be classified as an improper transfer and count against the applicant’s eligibility.

Additionally, a Medicaid applicant can purchase anything, including services, for their own benefit in order to reduce assets. These can include medical equipment, health care services, or anything similar. However, they can also include luxury items as long as the applicant will be able to keep them and take them with them into the nursing home. We’ve seen clients buy 55-inch televisions for their nursing home room and up to $9,000 in jewelry as Ohio Medicaid spend-down purchases.

However, because Ohio Medicaid spend down can significantly reduce the size of your estate and what your heirs will inherit, it is better to do advance Ohio Medicaid planning with the assistance of a knowledgeable Ohio elder law lawyer. In Ohio, the elder law firm of Gudorf Law Group, LLC, can assist with both Ohio Medicaid planning and spend-down purchases. Call our office at 1-877-483-6730 to schedule a free consultation regarding Ohio Medicaid spend down purchases.