The United States Government Accountability Office (“GAO”) recently identified four main methods used by applicants to reduce their countable assets—income or resources—and qualify for Medicaid coverage:

1. spending countable resources on goods and services that are not countable towards financial eligibility, such as prepaid funeral arrangements;

2. converting countable resources into non-countable resources that generate an income stream for the applicant, such as an annuity or promissory note;

3. giving away countable assets as a gift to another individual—such gifts could lead to a penalty period that delays Medicaid nursing home coverage; and

4. for married applicants, increasing the amount of assets a spouse remaining in the community can retain, such as through the purchase of an annuity.

Source: GAO Report “GAO-14-473”

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