When an applicant has more money or property (resources) than the Maximum Resource Standard allows, they must “spend down” those resources to become eligible for Medicaid LTC services.

1. The Goal: The Resource Standard

To be eligible for LTC, the client’s countable resources must be at or below the Individual Maximum Resource Standard (found in Appendix C-1, Schedule VIII).

2. How to Spend Down Appropriately

Clients often ask what they can buy to reach the limit. The golden rule is: The money must be spent on the client’s own needs.

• Common Allowable Expenses: Paying off personal debt (mortgages, car loans), home repairs for safety/accessibility, medical needs (hearing aids, glasses), or prepaying funeral trusts (up to $15,000).
• The Danger Zone: Resources must not be given away or sold for less than they are worth. This is a “Transfer of Resources” and can lead to a penalty period where they aren’t eligible for care.
• Common Method: Most clients simply “private pay” the nursing facility until their money reaches the allowable limit.

3. Determining the Certification Date

Oklahoma Medicaid can cover medical services back to the first day of the month, but the LTC/Nursing Home Authorizationdepends on the day the resources came within the standard.

• The Effective Date: This is the day after the spending occurred that brought them under the limit.
• The 30-Day Rule: If the excess resources are less than the cost of one month’s vendor payment, you can delay certification for up to 30 days while the client makes a plan to spend the money.
• When to Deny: If the excess resources + excess income are more than the cost of one month’s vendor payment, the application must be denied.

Example Scenario

• Oct 1: Judy applies. She has $2,400 in checking after subtracting her countable monthly income out. The limit is $2,000.
• Status: She is $400 over the limit.
• Oct 17: Judy buys a $450 recliner for her room and provides the receipt.
• Result: * Medical Tab: Certified effective Oct 1 (Medical coverage goes back to the first of the month).
  • Nursing Home Auth: Approved effective Oct 18 (The day after she spent the money to get under the limit).

Key Takeaways

• Always ask for receipts. You need proof of where the money went to ensure it wasn’t a gift or transfer.
• Effective date = Day AFTER spenddown.

When in doubt, contact HRMS. If a client wants to make a unique purchase, check with policy experts before advising them.