How do you manage the spend down if your income is only your SS check and all goes to maintaining your home?

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How do you manage the spend down if your income is only your SS check and all goes to maintaining your home?

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My wife and I receive social security checks which 100% of them go to maintaining our home & basic living expenses (namely food). We have no savings, our daughter helps us tremendously to manage month to month, yet I have a spend down of close to $400 for Medicaid which is an extreme hardship.

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Medicaid questions are always state-specific, so the ideas in this post can't be applied as an answer to LIFleaBag1934"s question. But their situation does sound dire, so I wanted to pass along some ideas that could provide hope for people who feel caught in the middle of Medicaid's income rules.

If the question is about home care services paid by Medicaid, the Medicaid agency in my state (Massachusetts) has regulations that allow people who have income over the Federal Poverty Limit to pay a deductible amount over the course of 6 months, and then qualify for Medicaid during the rest of the year. The deductible in my state is the amount that the family’s income before taxes and deductions exceeds the income standard for a six-month period. This deductible can be met when your out-of-pocket medical bills equal or exceed the deductible amount. There are many expenses that can quickly add up to meet the deductible: Medicare premiums and other health insurance premiums (which can be credited prospectively) medical treatment co-pays, over-the-counter remedies, supplies for incontinent adults, foot care, lifeline monitoring, alternative medical treatments such as acupuncture, and, of course, home health care.

If the question concerns a spouse who is already in a nursing home, federal law provides that "if either spouse establishes that the community spouse resource allowance (in relation to the amount of income generated by such an allowance) is inadequate to raise the community spouse’s income to the minimum monthly maintenance needs allowance" the state can allow an amount of assets adequate to provide a minimum monthly maintenance needs allowance (MMMNA). In my state, the community spouse may receive income in excess of the MMMNA if there are exceptional circumstances resulting in significant financial duress that justify the additional monthly income.

The take away concept here is: Mediciad regulations in many states make it possible for people to qualify for coverage. The regulations are intended to help people continue to live safely at home. The benefits of getting help from an elder law attorney who understands your specific circumstances usually make it worthwhile to consult a professional advocate near you.

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LilFlea - the whole living in the community compliance within medicaid is such a cluster. Everything seems to be a moving target for what, when & why things are paid. Jeanne's insight on couples/spouse aspects on all this is incredibly valuable as most on this site are dealing with parent medicaid issues which is very different & waaaaay simpler.

Mortgage.It's the albatross. Your mortgage is probably the biggest issue. Pull out the mortgage agreement - what do you owe, interest rate, when will it be paid off? What % of your monthly income is mortgage payment? If its more than 25% you can't afford the current mortgage.

Find the mortgage interest statement sent for 2014 taxes, just how much interest did you pay last year? And what % of your total yearly income was that interest? If its maybe more than 10% of it, you can't afford the mortgage IMHO.

So What to do? Can you refinance to get a dramatically lower rate? If you don't have many years left on the note, could you, your kids or other family get the $ to pay off the note? If you keep things are they now are, just when would the mortgage be paid off? 5 years, 10, or longer? if you are looking at years & years of debt service on this house - giving the strain you already have in making ends meet - you just cannot afford to live there. All areas have senior subsidized housing, it will require research to find a good matchup but maybe take a realistic look into doing this.

I'd suggest you speak with a couple of Realtors as to what the house in its current condition would sell for AND clearly ask what the DOM (days on market) is for sales in your area. If the house sold for the anticipated price the realtors came up with, how much would you all have left after closing costs & mortgage paid off?

People may say buy another house, but since you are on Medicaid and if it's likely that your wife may need Medicaid as well, buying another home really only benefits the state as state will place a claim or lien on your estate due to all having to have MERP done.

Knowing the DOM is important, as it helps you to know just how soon you have to find alternative living space.

Selling your home and divesting perhaps decades of stuff is really hard to do. But
Sometimes makes best financial sense. It's a lot to think about.

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Hi everyone, this is LIFleaBag's daughter, thank you for your responses. The house is a very touchy subject, especially for my mother. They worked so hard to get this house and when the recession hit, they - as many others - were affected greatly financially. The house is the only thing of true value they have left. My mother is VEHEMENT about not losing, selling or doing anything else with it. There have been several conversations, not to mention in the state in which we live (NY), cost of living is ridiculous no matter where you go. My parents are both very independent and do not want to go a senior living community for various reasons, mostly because of the space they have/have gotten used to. The house is like their crown jewel, they will do whatever it takes to keep it. BTW, payments are up to date, its just as my dad stated, everything goes to the house and I have to step in to plug the holes on other basic essentials.

My mother wrote a spousal refusal letter for my dad to receive Medicaid, all he gets is a SS check which is $400 over the $825 single person limit in NY - which is outrageous considering NO ONE could live on that in this state, ever. It's mind-boggling the spend down is so high, which precludes him from getting other services (i.e.: SNAP that he could benefit from).

Indeed Igloo, getting old in the US is not going to be pretty. We do not value our seniors in the least.

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It sounds as though your housing costs are eating up too much of your income. Would it make any sense to downsize into an aoartment, a senior housing unit or other housing option that is less costly than a dingle family home?

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Is there any benefit in considering a reverse mortgage for this situation? If there is equity in the house, but extra cash is needed to help with bills, that may offer the assistance needed for time being.

If the wife isn't currently in need of Medicaid, isn't she allowed to keep up to $109,560 in non-exempt assets?

I don't know that I have any helpful advice to offer, but I'm currently trying to understand more about the Medicaid rules & regs myself.

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LIFleaBag1934 daughter, are your parents willing to go without eating to keep that house? What happens if the furnace goes out and needs total replacement? One time I had three appliances that needed replacing in an one month span.

Alison, I would give reverse mortgages a thumbs down... the ads on TV make it sound so easy, but once the mortgage holder passes on, then it could become a nightmare.... the loan becomes due and payable, and if the heirs cannot refinance the house, then the house has to be sold or it goes into foreclosure. I saw the down side of reverse mortgage when my boss' wife had passed away, he couldn't stay in the house they had owned for 30 years even though the house was willed to him because his name wasn't on that loan, he couldn't re-finance, thus he was forced to sell.

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I don't think you can get a reverse mortgage when you are on Medicaid, because Medicaid counts the money you get as income.

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Be careful with reverse mortgage. Go to someone who has a good honest reputation. I'm not very clear on this but it made it to the news. The dishonest ones would do the paperwork with both spouses. When it came to signing, only the husband signed. They reassured husband. He died wife left out in the cold. But the more common problems was not reading the fine print and following it. Very important- those fine prints.

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LIFleaBag1934, your plight haunts me. The basic problem is your state's incredibly low income threshold level, isn't it?

Have you come up with any viable options? I'm wishing the best for you!

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Annajane, thanks for that insight. This may sound silly, but how does one get a social worker? My dad has one by default through his dialysis center (she's been a complete & utter godsend), so I know they are very helpful. My mother is just starting her health journey and does not have one yet.

Jeannegibbs - nothing yet, but I'm optimistic. It is indeed the low income threshold, which truly confuses me considering the cost of living here as I've mentioned. I've definitely going to try Annajane's suggestion and call SS directly & become that "dog with a bone" if you will.

How do you manage the spend down if your income is only your SS check and all goes to maintaining your home?

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