Medicaid Information

By definition, Medicaid is a jointly funded program managed by both the state and federal government. Medicaid offers medical treatment, including nursing home care for low-income individuals who are 65 or older, blind or disabled.

The rules for qualifying for Medicaid change often and vary from state to state and from county to county. Medicaid is not considered an entitlement program like Social Security; rather, it is a needs-based program. Because it is based on the need, a person is not eligible to receive Medicaid benefits as a matter of right. Each person must make himself or herself eligible.

As a component of qualifying for Medicaid, a person must have limited assets. To limit assets, a person may be required to "spend down" his or her assets to a level as determined by the appropriate regulatory agency in his or her area.

The concept of "spending down" is simple. Essentially, the Medicaid agencies will provide funding for nursing home care only once a person's assets have been reduced to the specified limits.

If a person's assets exceed the specified limits, then he or she may have to use his or her own assets to pay for his or her care in a nursing home.

There are several methods to "spend down" assets, one of which is to prepay funeral or cremation expenses. Most agencies will exclude a prepaid funeral plan (within limits) when determining eligibility for assistance.