The Sooner You Know About Medicaid Exempt Assets the Better
When it comes to Medicaid exempt assets, the guidelines are nearly iron clad. As with most aspects of senior planning, it’s important to know about which assets are counted or exempt so you can prepare in the event you or a spouse require long term care in a nursing home. This article outlines what assets Medicaid excludes and which assets are counted.
Medicaid’s Strict Asset Guidelines
First, it’s worth noting that Medicaid is a state-run program and some smaller details may vary based on state. Unfortunately, the Department of Human Services that oversee the applicant process does not care if you have already spent money on a nursing home or if you are in a high tax bracket. Their job is to examine your available assets (decide what is non-exempt or exempt asset), assess your ability to pay for care and determine if you are eligible for Medicare benefits.
When Does the State Look at My Available Assets?
The department looks at your assets for the day that you apply for Medicaid. It is also important to know that the state has something called a ‘look back’ rule. We talk about this in greater detail in another post. But if you move property, money or other assets for up to 60 days prior to applying for Medicaid, you can be penalized for a portion of those assets.
Different Asset Categories
Assets fall into three different categories under the Medicaid program.
For this article, we are just going to discuss Medicaid Exempt Assets.
Main Types of Exempt Assets
The following property is not considered by Medicaid as being available to help paying for nursing home care:
A house is considered exempt if it’s equitable value below $500,000. There is an additional stipulation, however, if a spouse, minor child, or disabled child lives in the home, there is no limit.
The nursing home resident is allowed $2,000 that may be kept in a bank account or as cash.
One vehicle of any make, model or value may be exempt. The rules consider a vehicle a truck, motor home, car, motorcycle, or a boat. Additionally, if an individual (or household if there is a spouse) has more than one car, the vehicle with greater value will be exempt.
Personal belongings including clothing, furniture and other items considered necessary for daily living.
A portion of a life insurance policy may be exempt. You must first determine the face value of the policy, and if that value is $1,500 or less, it is exempt.
Funeral and burial expenses. Prepaid funeral contracts that do not exceed $11,393 and have a ‘Irrevocable Funeral Contract Certification.’ Also, a burial fund that has been clearly designated up to $1,500 is exempt. Any burial space assigned for an individual or family member such as a mausoleum, crypt, or grave site plus the cost for maintenance is a Medicaid exempt asset.
Navigating Medicaid language can be a bit of a nightmare. Before moving assets or making any decisions you should always consult with a senior care specialist or Elder Law Attorney. We help individuals and families navigate this process successfully all the time.