As heard on the "Protecting Your Future" show
OHIO: Medicaid Guidelines for using Spend Down Funds for Burial Assets:
5101:1-39-32.2 Medicaid: burial spaces.
(A) A burial space or agreement which represents the purchase of a burial space held for the burial of the individual, his or her spouse, or any other member of his or her immediate family is an excluded resource, regardless of value. Of items that serve the same purpose, exclude only one per person. For example, exclude a cemetery lot and a casket for the same person, but not a casket and an urn.
(B) Spaces held by deemors for the burial of an eligible individual, his/her spouse and/or any member of the eligible individual’s immediate family (including the deemor) are excludable. Space held by an alien sponsor or essential person for his/her own burial are excludable only if the sponsor/essential person is a member of the eligible individual’s immediate family.
(C) A burial space is a burial plot, gravesite, crypt, mausoleum, casket, urn, niche, or other repository customarily and traditionally used for the deceased’s bodily remains. The term also includes necessary and reasonable improvements or additions to such spaces, including but not limited to vaults, headstones, markers, or plaques, burial containers (e. g., for caskets) and arrangements for the opening and closing of the gravesite. For example, a contract for care and maintenance of the gravesite, sometimes referred to as an endowment or perpetual care, can be excluded as a burial space.
(D) an agreement which represents the purchase of a burial space is a contract with a burial provider for a burial space held for the eligible individual or a member of his/her immediate family. An individual’s immediate family includes his parents, including adoptive parents, minor or adult children, including adoptive and stepchildren, siblings, including adoptive and stepsiblings and the spouses of the immediate family members. In order for the burial space exclusion to apply to spouses of the immediate family members, the marriage must be in effect. For example, a burial space held for a sister-in-law is no longer excludable if she and the individual’s brother divorce.
(E) A burial space is held for an individual when someone currently has title to and/or possesses a burial space intended for the individual’s use (e. g., has title to a burial plot or owns a burial urn stored in the basement for his own use) or a contract with a funeral service company for specified burial spaces for the individual’s burial (i.e., an agreement which represents the individual’s current right to the use of the items at the amount shown).
(F) If the contract shows the purchase of a specified burial space at a specified price, determine whether such space is held for the individual or member of the individual’s immediate family. If the space is held for the individual, determine if the contract is irrevocable or revocable. If irrevocable, it is not a resource. If the contract is revocable, the burial space is an excludable resource. Until the purchase price is paid in full, a burial space is not “held for” an individual under an installment sales contract or similar device. If the individual does not currently own the space, he does not currently have the right to use the space, and the seller is not currently obligated to provide the space. If the contract calls for installment payments, determine whether the value of the burial space must be treated as an available resource.
R.C. 119.032 review dates: 4/19/2002 and 04/19/2007
Promulgated Under: 111.15
Statutory Authority: 5111.01, 5111.011
Rule Amplifies: 5111.011, 5111.01
Prior Effective Dates: 9/3/77, 2/1/79, 10/1/79, 1/3/80, 12/1/84 (emer.), 2/10/85, 9/1/94
Check with your state's Medicaid office and or your Attorny about state specific Spend Down Rules.
Keep your clients from generation-to-generation,
Medicaid spend-down applies when an individual or a couple have countable resources in excess of the eligibility limits. Before the individual or couple will be entitled to Ohio Medicaid assistance, the excess resources must be expended in some permissible manner. Most expenditures, other than gifts, will qualify for this purpose.
When a couple is involved, this will generally mean that the countable resources must be reduced by half, subject to a "floor" and "ceiling." The floor is currently $21,912. The ceiling is currently $109,560. In determining values, the assets of the couple at the time the first of the them had a period of institutionalization of thirty days or more is utilized. Accordingly, if the countable assets were $100,000 when the one spouse entered the nursing home, this amount is cut in half and the assets must be spent down to $50,000. If the original amount was $300,000, the ceiling comes into play and more than half must be spent (maximum that can be retained by the healthy spouse is $109,560). Similarly, if the original amount was $15,000, then there is no required spend down because of the $21,912 floor.
An example will illustrate the importance of understanding these rules. Take two couples with a pending nursing home stay on the part of the husband. The wives, Jennifer and Kimberly, are in the exact financial situation. Each has a home worth $150,000, subject to a $25,000 mortgage, assets in the bank worth $50,000, and credit card debt of $15,000.
Jennifer decides that she should take care of a few things before her husband enters the nursing home. So she sells their home, places the proceeds from the sale in the bank, and pays off her debts. She now has $160,000 in the bank. Jennifer's husband then is placed in the nursing home, and upon application for Ohio Medicaid, she is told they must spend down $80,000.
Kimberly does nothing until after her husband enters the nursing home. She has $50,000 of countable assets, so she must spend down $25,000. She does this by paying off the mortgage. Kimberly does not have to spend any money on the nursing home and the facility begins to receive Ohio Medicaid vendor payments immediately. Medicaid law and practice should allow Kimberly to later sell the home and place the proceeds in investments. She could then pay off the other credit card debt and end up with $160,000 in investments, whereas Jennifer would only have $80,000.
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The Medicaid program that helps pay for long term care allows the patient and the patient's spouse to keep certain amounts of their savings and certain amounts from their monthly income. As of January 2010, Ohio's Medicaid program allows the following amounts:
Savings patient can keep: $1,500
Savings spouse at home can keep: $21,912 - $109,560
Monthly income patient can keep: $40
Monthly income allowance for spouse: $1,821 - $2,739
Monthly housing allowance for spouse at home: $546
Monthly utility allowance for spouse at home: $588
What Medicaid pays nursing homes each month: $6,023
This information is provided to further the mission of The Koewler Law Firm "Protecting a Senior's Life Savings." TM
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