Medi-Cal Application FAQ: What Is Spend Down?

Bridget Mackay here and I’m addressing all the frequently asked questions about Long-term Medi-Cal. You can also find these questions and answers on my website, www.bridgetmackaylaw.com. I’m an attorney in Petaluma and I practice in the area of estate planning and elder law.

Question number two on my frequently asked questions is, “What is a spend down?” Many people believe they must spend down their life savings to acceptable levels before applying for Long-term Medi-Cal. Those levels I’ve mentioned before. If you’re a couple and you have one ill spouse, it’s a $119,200 in assets is the maximum of assets you can have before you apply. And if you’re a single person, that number is $2000. But spending down can bring… If you’re over those assets, spending down can bring your assets to eligibility levels.

However, in California, there are unique regulations that allow applicants to re-characterize their assets through differing methods, like sales of assets, transfers, leases, life estates which will allow applicants to bring their assets down to an acceptable level and benefit them and protect them from any Medi-Cal recovery, so they would be able to apply and protect their assets from recovery. A spend down is when you are reducing the level of assets to the eligibility levels that I mentioned before. Again, do this with an abundance of caution and always with the counsel of an experienced estate planning attorney.

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