Mastering Wisconsin Medicaid Spend Down Rules
2025 Asset Protection Guide
With many nursing home costs adding up to $10,000 monthly in Wisconsin, savings can vanish fast. This guide simplifies Medicaid spend down rules, updated for February 27, 2025, with precise figures and strategies to protect your assets—all in about 600 words.
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What Is Medicaid Spend Down in Wisconsin?
Medicaid spend down reduces income or assets to meet Wisconsin’s limits: $2,000 in countable assets for individuals and $1,304.17 monthly income (2024, pending 2025 updates) Wisconsin DHS. Excess can only be spent on approved expenses.
Understanding Exempt vs. Countable Assets
Knowing which assets are counted against Medicaid eligibility is critical:
- Exempt Assets: Primary residence (up to $713,000 equity), one vehicle, burial plots, personal belongings, prepaid funeral trusts
- Countable Assets: Cash, bank accounts, investments, retirement funds, secondary properties, cash value life insurance policies
5 Essential Wisconsin Medicaid Spend Down Rules
- Asset Limits Cap at $2,000 Countable assets must fall below $2,000 ($3,000 for couples) Wisconsin DHS. Exemption for non receiving spouse: home (up to $713,000 equity), one car, prepaid funeral costs.
- Income Requires Specific Spend Down The limit is $1,304.17 monthly, according to ForwardHealth WI. For example, a $2,500 income requires $1,195.83 in medical bills ($2,500 - $1,304.17) to qualify.
- Refi Trust Protects $15,000 instantly Irrevocable funeral trusts (IFTs) shield $15,000 per person immediately—there is no look-back DHS WI. Unlike bank trusts capped at $4,250, RefiTrust's insurance-backed IFT provides stronger protection.
- 5-Year Lookback Hits Transfers Wisconsin reviews financial activity for five years. Gifting assets during this period can trigger penalties of $13,863 per month of transferred value (2024). Medicaid Planning Assistance.
- Estate Recovery Targets Assets Post-death, Wisconsin may claim probate assets or your home—unless delayed by a spouse, minor, or disabled child DHS WI.
Wisconsin Spousal Impoverishment Protections
For couples, protections include:
- Monthly Allowance: $2,288.75–$3,715.50 (DHS WI)
- Resource Limit: Up to $148,620 (DHS WI)
- Exemptions: Home, personal goods, one vehicle
- Advanced Planning Strategies: Convert excess income, protect home equity, and ensure financial stability for the community spouse
Without proper planning, the well spouse may face hardship in maintaining independence. Our tailored strategies help prevent hardship.
Qualifying Spend Down Expenses in Wisconsin
Approved costs:
- Nursing home fees ($9,125–$12,000/month) (DHS WI)
- Medical equipment
- Prescription drugs
- Doctor bills
- Insurance premiums
Gifts DO NOT qualify.
How to Protect Assets in Wisconsin
Irrevocable Funeral Trusts
Protect $15,000 per person immediately. Up to $100,000 can be protected if established 5+ years in advance. Fully exempt from Medicaid (DHS WI).
Convert Life Insurance
Cash-value policies become exempt when transferred to IFTs. Avoid premium burdens and nursing home loss (DHS WI).
Spend Wisely
Use excess assets on exempt purchases (e.g., home ramps, hearing aids).
Trust Type Matters
Revocable trusts offer no Medicaid protection. Only irrevocable trusts remove assets from countable totals.
Why Choose Refi Trust for Wisconsin Medicaid Spend Down Planning?
At Refi Trust, we specialize in helping Wisconsin seniors navigate Wisconsin’s Medicaid spend down laws:
- Immediate Asset Protection: Shield up to $15,000 (for yourself AND for each family member) with an irrevocable funeral trust
- Estate Recovery Defense: Keep funds safe from posthumous Medicaid claims
- Zero Service Fees: Completely cost-free consultations and trust setup
- Rapid Burial Trust Fund Distribution: Wire funds to the chosen funeral home within 48 hours
- Superior Protection: Insurance-backed trusts exceed bank limitations
Don’t let Medicaid spend down rules drain your family’s assets. Contact Refi Trust today for a free consultation to secure your legacy. We offer nationwide services with Wisconsin-specific expertise, drawing clients from Milwaukee, Racine, Kenosha, Waukesha, Ozaukee, Washington County, and beyond.