When it comes to Medicaid, all assets not equal
To qualify for long-term care assistance from Medicaid, a senior applicant must establish both health and financial need. Financial needs are determined based on both the income and the assets of the applicant. The last few weeks we have addressed Medicaid’s income limit. Starting today, we will address Medicaid’s asset limit.
Most people have heard that they can have only $2,000 in assets to qualify for Medicaid assistance. There is a nugget (but only a nugget) of truth to this statement.
In reality, a single individual is limited to $2,000 in “countable resources” to qualify. A married couple may have $3,000 in assets. For our purposes, “assets” and “resources” may be treated as synonyms. The key is whether those assets/resources are “countable” against the $2,000 limit.
Perhaps the most significant “non-countable” asset is the applicant’s home. An applicant can have significant equity in his/her home that will not be counted against the asset limit. If married, there is no limit on the amount of equity the applicant may have in the home.
Additionally, an automobile, regardless of its value, will not be counted against an applicant. A healthy spouse is also permitted a separate automobile.
Other non-countable assets include burial expenses (up to $1,500), a burial plot, household goods and personal effects. Assets essential to allow you to support yourself are also excluded. Possibly the most common example would be assets essential to conduct your trade or business.
The retirement funds of a senior taking required minimum distributions are not counted against the asset limit (although the dispersed funds will be counted against the monthly income limit). There may also be other assets which are not counted, depending on the circumstances of the applicant.
Despite what so many have been told, it is possible to have a significant amount in assets and still not exceed the threshold of “non-countable resources.” Hopefully, a better understanding of these requirements will help seniors avoid making unwise decisions with their assets, and suffering potentially tragic consequences as a result.