Do POA fees count toward Medicaid spend-down?

A fellow caregiver asked...

I have POA for my father in Wisconsin. The legal instrument states that I may be compensated for these efforts on his behalf. If my father is spending down for Medicaid eligibility, are the POA fees I receive eligible spend-down costs?

Expert Answer

Whether the fees someone pays under a Power of Attorney (POA) are considered a valid "spend down" under Medicaid rules depends on what kind of spend down is involved. In Medicaid matters, the term spend down is used in different ways. It can refer to spending down monthly income in order to meet Medicaid income eligibility levels. Or, it can refer to spending down a person's assets to meet the Medicaid asset eligibility level, either for Medicaid medical care coverage or for Medicaid nursing home coverage.

If you're asking about POA fees as spending down of income in order to qualify for Medicaid, the answer is that the POA fees probably are not considered by Medicaid to be part of a spend-down. That's because income spend-downs are usually limited to expenses for medical or remedial (therapy or rehabilitation) care. Since the tasks performed by you under a POA are not medical or remedial, they are unlikely to be considered spend-down costs regarding income. However, every state manages its own Medicaid program, and rules vary from state to state. So, to get a final word on this, you'd have to contact the Wisconsin Medicaid program directly.

If you're wondering about your father spending down his assets in order to qualify for Medicaid coverage of his medical care, there are no restrictions on how he can dispose of assets. So, the POA payments would reduce his assets just like any other expense.

Finally, if your question is about your father spending down his assets to qualify for Medicaid coverage of nursing home care, the rules are more complicated. When deciding how much of an applicant's assets to "count" in deciding eligibility for nursing home coverage, Medicaid looks at any amount spent by the applicant in the five years prior to applying for coverage. Any amount that was simply given away during that period, or transferred to someone else for less than full value, is considered by Medicaid as still belonging to the applicant and can disqualify the applicant from eligibility for a period of time. On the other hand, any legitimate expenditures an applicant has made are not counted when Medicaid considers the applicant's assets. (And there is no restriction to medical or remedial expenses -- an applicant can spend money however he or she wants, as long as it is a legitimate expenditure and not a giveaway or "hiding" of money.) Since the money your father pays you under the POA is a legitimate expense provided for in the POA agreement, those amounts would not be counted as part of your father's assets when Medicaid determines his nursing home coverage eligibility.