Division of assets is the name commonly used for the Medicaid spousal impoverishment rules and applies only to married couples. The intent of the law was to change the eligibility requirements for Medicaid in situations where only one spouse requires nursing home care, while the other remains in the community.
Essentially, in a Medicaid division or assets, a married couple gathers all of their countable assets together in a review. The countable assets are then divided in two, with the community spouse being allowed to keep one half of all the countable assets, up to a maximum of $115,982.00. The other half of the assets must then be spent to $2,000 to become eligible for Medicaid benefits.
Medicaid rules concerning the spending down of assets are very complicated. Basically someone who is pursuing Medicaid eligibility for a spouse should consider the following options:
- Purchase pre-paid funeral plans and burial plots
- Purchase a new car
- Pay healthcare costs (including nursing home care if necessary)
- Purchase a new primary home
- Make home improvements
- Buy household goods or personal items
- Repay any debt
These are not the only appropriate items for a Medicaid spend down and they are not appropriate for every Medicaid applicant. The main rule to keep in mind is that whatever goods or services are purchased must be done at fair market value and must be for the benefit of the either spouse to avoid Medicaid penalties.