How To Prepare Your Finances For the Title 19 Medicaid Process.

When processing your Title 19 medicaid application, the Department of Social Services takes a scrutinized look into 5 years of your bank statements and entire financial portfolio. In Connecticut, there is a strict $1,600 asset limit for unmarried individuals. If you are married with a spouse living at home, you may keep $1,600 of your own money plus up to $154,140 for your spouse (total maximum $155,740).

What is a "Spend Down"?

Say you have $51,600 in cash, stocks, bonds, retirement accounts, life insurance, then you are over assets by $50,000. You have to “spend down” to $1,600 before your application is considered eligible. Pending checks may affect your account balance so make sure any payments you make are completely deducted from your account. Any month in which the total value of your assets is over $1,600 means you are not eligible for benefits.

Additionally, you may be asked for explanations on transactions larger than $5,000 so keep receipts on all large transactions. Large monetary gifts to loved ones or friends within the 5 year look back period may affect your application's eligibility.

Here are some of the spend down options that are allowed;

Home Improvements

New washing machine, get a new roof, your dream kitchen, go crazy! While this only applies to those who have a spouse living at home or those with children/ disabled children under 21, the possibilities are endless with what home improvements you can make. Your home is an exempt asset as long as your spouse (or under 21 or disabled child) is living there. Pay off the mortgage (unless you are trying to protect funds for your spouse, in which case check with your attorney). Your spouse can always borrow against the house later, or even sell it.

Personal Effects, Furniture, Electronics, Household items

It is smart to keep receipts for large purchases just in case.

An Extensive Medical Check

It is a good time to attend to any problems that the state may not find important, especially getting the best hearing aid/wheel chair/voice adapter/ventilator money can buy (and a spare if you can). Title 19 program can have very mediocre dental and medical coverage, especially for nursing home residents, and few dentists are willing to participate. The State is probably not going to pay for dental implants or more than half a set of dentures a year.  It is best to have your teeth checked thoroughly, all dental work completed and all fixtures bought. If you are in a nursing home, ask whether you can be transported to a dentist outside. If the work won't be done before you have "spent down," arrange to pay the bill up front.

A Vehicle

If one spouse is at home and one is in a nursing home (or receiving home care "under the Medicaid waiver" program), one car of any value. If neither applies, then one car of any value "needed" to transport you to medical appointments is allowed.

An Estate Plan

If you do not have one already, consider getting the basics; A Last Will and Testament, Power of Attorney, Health Care Proxy, etc. It is a good idea to appoint a Conservator in case one is required. If you are married and the home is in your name, transfer it to your spouse! Finally, many people want Living Wills that authorize life support to be withheld or withdrawn if you are terminal or in a "persistent vegetative state."  You MAY add more specific instructions, too.  All health matters can be combined in one document. 

Irrevocable Funeral Contract

While Medicaid itself does not directly provide tax deductions, expenses paid out-of-pocket before Medicaid coverage begins may be deductible. Additionally, some states allow Medicaid-qualifying trusts (such as Miller Trusts) to be structured in a way that provides tax advantages.

Burial Contract

This includes a revocable "burial trust" to pay for things like a casket or grave liner.  You can have one for you and your spouse.  This may be more than $10,000 (see "Burial Plot" which typically allows you to get a more expensive funeral) If the funeral home issues both, they need to specify what is covered.

Term Life Insurance

The State only allows these to be issued in Connecticut up to $10,000. If you don't have one of these, a revocable contract of $1,500 (less the value of any counted insurance). Other life insurance policies are allowed only if the face value of all policies combined is $1,500 or less.

Reverse Mortgage or Home Equity Loan proceeds in a SEGREGATED account.

We recommend speaking with an attorney about how your home may impact your eligiblity.

Trusts, Promissory Notes, Annuities (vary greatly) 

Your garden variety "living trust" or annuity is not protected.  In some cases, if the annuity is irrevocable and non-assignable, has a term no longer than your actuarial life expectancy, and the beneficiary is the State (up to the amount of Medicaid you get during life) after your spouse or child under 21 or disabled child -- this will be exempt.  If a trust was set up for your "support'" it may not be exempt, but it depends on the precise words of the document. Consult an attorney regarding your specific estate plan.

Note:  This information is subject to change by state and varies on a case by case basis. Consult with an attorney before taking matters into your own hands.

We would love to discuss a Title 19 Medicaid game plan that is customized to your needs, call us at (860) 400-3020 to schedule a consultation today!

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