KanCare Spend Down Checklist: Allowable Expenses to Reach the Asset Limit

The Goal: Get Below $2,000 Without Triggering Penalties

Kansas Medicaid long-term care requires single applicants to have no more than $2,000 in countable assets. Married couples with both spouses applying must reach $3,000. If one spouse is the applicant and the other is the community spouse, the applicant's countable assets must be below $2,000 while the community spouse keeps up to $162,660 through the CSRA.

The spend-down is about converting countable assets (cash, investments, CDs) into either exempt assets or legitimate expenses — not giving them away. Gifts trigger lookback penalties. Spending on yourself or your household does not.

Allowable Spend-Down Expenses

Pay Off Existing Debts

• Mortgage balance (paying down or paying off the home loan)
• Home equity line of credit
• Credit card balances
• Medical bills (current and past-due)
• Car loan balance
• Property tax arrears
• Utility arrears

Paying off debts is the simplest and least controversial spend-down strategy. The KanCare Clearinghouse expects to see it, and there is no dollar cap.

Home Improvements and Repairs

• Roof replacement
• HVAC system upgrade
• Accessibility modifications (wheelchair ramps, grab bars, walk-in shower, widened doorways)
• Plumbing and electrical repairs
• Foundation work
• New appliances (replacing broken or outdated units)
• Exterior painting and siding

The home is an exempt asset, so every dollar spent improving it converts a countable resource (cash) into an exempt one (home equity). Keep receipts — the Clearinghouse may verify that home improvements actually occurred.

Irrevocable Burial Trusts

• Up to $7,000 for funeral services under K.S.A. 16-303
• Unlimited amount for designated burial space items (casket, vault, headstone, cemetery plot, perpetual care)
• Can fund one trust per person (both spouses can each have their own)

This is one of the highest-value spend-down tools. A couple can shelter $20,000 or more between two burial trusts with carefully itemized burial space items.

Vehicle Purchase or Upgrade

• One vehicle of any value is fully exempt
• If the current vehicle is aging, upgrading to a newer or more reliable car is a compliant spend-down
• The vehicle must be titled in the applicant's or community spouse's name

Prepay Care Costs

• Prepay a few months of private nursing home care
• Prepay home health aide services
• Pay outstanding assisted living or adult day care invoices

Personal and Household Items

• Furniture and household goods (fully exempt once purchased)
• Clothing
• Personal effects
• Assistive devices not covered by insurance (hearing aids, eyeglasses, mobility equipment)

Medical and Dental Care

• Dental work (crowns, dentures, implants)
• Hearing aids
• Eyeglasses
• Prescription costs not covered by Medicare or supplemental insurance
• Over-the-counter medical supplies

What You Cannot Do

Give cash or assets to family members. Any transfer for less than fair market value within the 60-month lookback window triggers a penalty period. The daily penalty divisor is $308.25 — a $30,000 gift creates roughly a 97-day penalty during which the family pays the full nursing home rate.

Pre-purchase gift cards or store credits for future use. The Clearinghouse may treat unused gift cards as a countable asset equivalent to cash.

Make large charitable donations. Donations within the lookback window are treated as uncompensated transfers. There is no Medicaid exemption for charitable giving.

Overpay for services. Paying $5,000 for a $500 repair job is treated as a transfer for less than fair market value. Keep pricing reasonable and documented.

The Spend-Down Sequence

Order matters. Start with the highest-priority items and work down:

1. Pay off all debts first. These are clear, documented, and unquestionable.
2. Fund irrevocable burial trusts. Maximum shelter for both spouses.
3. Complete home repairs and improvements. Get estimates first so you can plan the dollar allocation.
4. Address medical and dental needs. These improve quality of life and are clearly legitimate.
5. Vehicle upgrade if needed. Replace an unreliable vehicle.
6. Prepay care costs. Use remaining excess to cover immediate facility bills.

Throughout the process, track every expenditure with receipts. The KanCare Clearinghouse audits the spend-down as part of the lookback review. Undocumented spending draws questions.

The Kansas Medicaid Long-Term Care & Asset Protection Guide includes a printable spend-down worksheet that tracks your parent's asset balance against each expense category, plus a documentation checklist for the items the Clearinghouse most commonly requests.

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