As a joint state and federal program, Medicaid is subject to a variety of state requirements, as well as a broader set of federal requirements. To get the Medicaid nursing home benefit, an individual must pass the asset test. Those who have too high of an income or too many assets do not qualify for Medicaid. However, certain assets are exempt from the asset test, allowing individuals to maintain some of their property while still getting the nursing home benefit.
- Primary Residence
A Medicaid applicant’s home may not be considered an “asset” if the individual is applying for coverage in the state where the home is located. They must also have a plan to return to the home. Only certain homes are considered exempt; the owner’s equity interest must be below a certain amount, which changes each year with inflation and other variables.
- Up to $2,000 in Cash
An individual may have up to $2,000 in cash and not be barred from Medicaid. If the individual applying of Medicaid has a spouse still living in the home, the spouse may keep a minimum of $25,284.00 and a maximum of $126,420.00. The exact amount the spouse can keep in order for the individual to receive Medicaid depends on several factors and will be determined at the time of application.
- Automobile
An individual can have one automobile of reasonable value that doesn’t count against them for Medicaid.
- Prepaid Payments for Final Arrangements
If an individual has prepaid for their funeral, the money spent on these arrangements is not counted as part of the asset test. Burial plots are also exempt. If an applicant has not prepaid for their burial arrangements, they can spend up to $10,000.00 for themselves and their spouse for burial arrangements; these irrevocable burial agreements are exempt from the Medicaid test.
- Property That Allows an Individual to Support Themselves
Income-producing property is generally not included in the Medicaid asset test. For example, if an individual owns a home and rents it out, they can keep that property without it negatively impacting their Medicaid eligibility. To be exempt, the property must earn 6% of its value each year.
- Life Insurance
When looking at life insurance policies, the Medicaid program only considers the cash value of certain policies, as the death benefit is not accessible to the individual. For example, a policy with an original death benefit of up to $10,000.00 is excluded from the Medicaid asset test, no matter the cash value of the policy.
Planning for this stage of life can be challenging, but it’s easier with an experienced elder law attorney advocating for you. Learn more about your legal options now by contacting The Elder Care Law Firmat 800-491-6556.
