Medicaid Myth: Spend Down Your Money and Presto! Instant Medicaid

A note to you regarding your aging parent: Running out of money doesn’t necessarily translate into Medicaid eligibility.

A few weeks ago an Executive Director of a nearby retirement community emailed me.  A woman in his community we’ll call Sally had lived there at least five years.  She was nearly broke.

The community had a “spend down” policy of allowing people to convert to Medicaid funding after four years of private pay.  Since Sally had lived there more than that length of time, she’d be eligible for Medicaid, right?

Wrong.  Medicaid eligibility is two-fold:  financial and medical.  Sally is totally independent, taking her medications, dressing and bathing herself, and managing her activities of daily living.

Unfortunately, she has no medical need and flunks the Medicaid test.  Sally will need to leave her current community and find low-income housing.  Unfortunately, that option generally involves long waiting lists.

The moral to the story?  Don’t assume that if your parent exhausts his or her funds,  Medicaid is assured.