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The Basics of Medicaid
10-09-2008, 08:14 AM
To understand Medicaid qualifcations, you first need to know how Medicaid treats your assets. Basically, Medicaid breaks your assets down into two separate categories. The first are those assets which are exempt and the second are those assets which are nonexempt or countable.
Exempt assets are not counted by Medicaid for eligibility (at least for the time being). Laws between states differ. In North Carolina generally the following assets are exempt:
1. The home, no matter its value. The home must be the prinicipal place of residence.
2. Household and personal belongings, such as furniture, appliances, jewelry and clothing.
3. One vehicle, with current tags.
4. Prepaid funeral expenses and burial plots.
5. Cash value life insurance policies, as long as the face value of all policies added together does not exceed $10,000. If it does exceed $10,000 then the cash value in these policies is countable. Also, term life insurance is excempt.
6. A small amount of cash (such as a small checking or savings account) not to exceed $2,000.
Keep in mind, however, that Medicaid Estate Recovery can collect against a Medicaid recipient's estate to recoup payments made to the Medicaid recipient. For example, the home of a person who received Medicaid while still owning that exempt asset, might have to be sold to pay back Medicaid after the death of the recipient and the recipient's spouse if they are married.
All nonexempt assets are countable. This includes checking accounts, savings accounts, certificates of deposit, money market accounts, stocks, mutual funds, IRAs, pensions, second cars, and so on. While there are some exceptions, generally all money and property, and any item that can be valued and turned into cash is a countable asset, unless it is one of those listed above as exempt.
While the Medicaid rules themselves are complicated and somewhat tricky, for a single person it's safe to say that you will qualify for Medicaid as long as you have only exempt assets and a limited amount of cash (i.e. no more cash than the $2,000 mentioned above).
For a married couple, the community spouse (that is the spouse not needing nursing home or in home care) can generally keep one-half of the assets up to a maximum of roughly $104,000. Fortunately, there are things that can be done to protect assets beyond ths level.
New Medicaid rules continue to further restrict eligibility. Planning ahead is even more important now. Even with the new rules, a married couple can usually protect nearly all of their assets if one spouse needs nursing home care. If your spouse is in the nursing home or soon may be, be careful if anyone, even the Medicaid office, tells you to spend half your assets before applying for Medicaid. With the right planning you can protect your nest egg so you can worry about getting your spouse the care he or she needs, instead of worrying about your finances.
Dennis J. Toman, CELA, The Elderlaw Firm