How to Start a Medicaid Spend-down in Ohio

If you or someone you love needs long-term care, navigating the complexities of the Medicaid application process can be overwhelming and stressful. But, it's important to understand the Medicaid spend-down process to assess what benefits and care may be available. A Medicaid spend-down allows individuals to qualify for Medicaid by reducing their countable assets and income to a certain level. It is a daunting task, but with the right guidance and support from a qualified Medicaid attorney, the spend-down process can help accelerate Medicaid eligibility while protecting assets.

Understanding Medicaid Eligibility and Spenddown

The basic premise of Medicaid spend-down is to reduce an individual's assets and income to qualify for Medicaid coverage. In Ohio, the threshold for eligibility is quite low. In 2025, a single Nursing Home Medicaid applicant must meet the following criteria:

• Income under $2,901.00 / month
• Assets totaling under $2,000
• Require a Nursing Home Level of Care

Up-to-date eligibility information can be found on the Ohio Department of Medicaid's website.

To achieve eligibility, individuals may need to "spend down" their assets and/or income on permissible expenses. Additionally, there are complicated methods for converting countable assets into exempt resources, as well as allocating income from the institutionalized spouse to the community spouse, thus preventing the impoverishment of the community spouse. This process is very complex, with strict rules and regulations. Any missteps could result in penalties or delays in eligibility. This is why it is important to work with an experienced Medicaid attorney.

The Look Back Period

Ohio’s look-back period is a crucial aspect of Medicaid eligibility. When someone applies for Medicaid, Medicaid will require bank statements and other financial records from the preceding five years. An applicant must explain any "improper transfers" (i.e., assets that were given away or sold for less than fair market value). If the applicant made improper transfers, a penalty period may be imposed, during which they'll have to privately pay for nursing home care.

List All Assets

First, make a list of all your assets. This includes bank accounts, investments, real estate, vehicles, life insurance policies, retirement accounts, and any other assets of value. It is important to know the exact value of each asset, and any potential income generated from them.

Review Income Sources

Next, review your sources of income. This includes wages, social security benefits, pensions, annuities, required minimum distributions, rental income, etc.

Identify Countable and Non-Countable Assets

In Ohio, not all of a person's assets count towards Medicaid eligibility. Some assets are exempt and don't count towards the limit.

Countable assets include, but are not limited to:

• Cash
• Certificates of Deposit
• Stocks, bonds, and other investments
• Checking, savings, brokerage and other bank accounts
• Non-primary residences (such as vacation homes, rental properties, etc.)

Non-countable assets include, but are not limited to:

• Personal belongs (such as jewelry and household items)
• Furniture
• The primary home, to a certain extent
• The primary automobile
• Life insurance with a cash surrender value under $1,500

Calculate The Medicaid Eligibility Threshold and Spenddown Amount

Once you have assessed your financial situation and identified countable and non-countable assets, it is time to calculate the Medicaid eligibility threshold and the spend-down amount.  To determine the eligibility threshold, add up all your non-exempt assets, and determine your total income. Then subtract the threshold figures provided for 2024 assets and income. These two figures will give you a general idea of what needs to be reduced through the spend-down process to qualify for Medicaid.  Calculating the proper way to spend down assets and income is a quite complicated process, which differs depending on whether the applicant is married or single.

Spend Excess Income and Countable Assets

Your Medicaid attorney can help you determine expenditures that can be counted toward the spend-down amount.

Some examples are:

• Medical insurance premiums (like health, vision, dental and long-term care)
• Unpaid medical bills
• Co-pays and deductibles
• Paying off debt
• Prescriptions
• Physical therapy
• Legal fees
• Funeral Home trusts
• Medical equipment and supplies
• Transportation costs to get to medical appointments
• Home modifications
• Other care-related expenses

Convert Countable Assets into Exempt Assets

You can also use excess assets to purchase exempt assets. By converting countable assets into exempt assets, you can potentially qualify for Medicaid in Ohio without having to spend your entire savings. There are quite a few options available, and an experienced Medicaid planning attorney can help you determine which strategies are right for you.

Transferring Home Ownership

To avoid losing your home to a Medicaid lien, you may want to transfer your home ownership. DON’T DO IT without the assistance of a qualified Medicaid attorney. There are very strict rules that govern these types of transfers, and if done improperly, it can lead to Medicaid denials and penalties, as well as adverse tax consequences. This is not an option available to everyone, therefore it is important to consult with a Medicaid attorney before taking this action.

Qualified Income Trust

If your income exceeds the limit for Medicaid, it may be necessary to establish a Qualified Income Trust, also known as a Miller Trust. Any income over the limit will be placed into the trust and disregarded for Medicaid application purposes. Once you are approved for Medicaid, almost all of your income, including the income placed in the Qualified Income Trust, must be used to pay for care before Medicaid covers the remaining balance.

Gifting/Medicaid-Compliant Annuity

This strategy is usually used when long-term care is needed in the immediate future. It requires dividing the applicant’s assets into two shares: the “Gifted Share” and the “Medicaid-Compliant Annuity Share”. The gifted share is usually given to your children or an irrevocable trust for the children’s benefit. The Medicaid-compliant annuity share is used to purchase a special type of annuity that is not counted as an asset for Medicaid purposes. This annuity provides a monthly stream of income that can be used to pay for long-term care during the penalty period created by gifting.

These are just a few of the options available for a spend down. Before you spend excess assets or income, meet with a trusted Ohio Medicaid attorney. Spending down assets may have unintended estate planning, Medicaid and tax consequences if not done carefully. Don't wait until it's too late, start planning for your future healthcare needs now. Your health and financial well-being are worth it. Call my office at 614-334-6850 to schedule a meeting so we can start planning today.