Medicaid Asset Limits

Generally, a single Medicaid applicant is only permitted to keep up to $2,000 worth of assets. However, some states have different rules. For example, some states exempt burial funds and the face value of life insurance policies.

Medicaid eligibility requirements and income limits vary by state. Most states use 138% of the federal poverty level (FPL) as their benchmark. However, they can adjust the threshold based on household size. They can also change their rules for specific groups, such as pregnant women, children, or disabled adults. These are called MAGI coverage groups.

Countable assets include money in checking and savings accounts, investments, cash value in life insurance policies, and retirement accounts. A person’s primary residence, home furnishings, and personal property are not countable. The equity value of a person’s home is generally limited to about $70,000, but that amount can vary by state and Medicaid program. Married applicants who apply for nursing home Medicaid or a Medicaid Waiver are generally permitted to keep up to $2,000 in assets. However, a portion of the couple’s assets may be exempt under a “Community Spouse Resource Allowance” rule.

During the application process, an individual’s assets and financial records are scrutinized by a caseworker. Any gifts or sales of assets under fair market value made within five years of the application date are considered violations and can result in a Penalty Period of Medicaid ineligibility. This is why it is important to work with a qualified Medicaid planner. These professionals can help ensure that all assets are used wisely while protecting a significant portion of them for the future.

Understanding Assets

Countable vs. Exempt: Medicaid distinguishes between countable assets (included in the limit) and exempt assets (excluded). Countable assets include cash, investments, bank accounts, and some property. Exempt assets generally include your primary home, personal belongings, certain vehicles, and retirement accounts.

Married Couples: For married couples, both spouses’ assets are typically considered jointly, even if only one applies for Medicaid. However, Community Spouse Resource Allowances (CSRA) protect a portion of assets for the non-applicant spouse to maintain their financial security.

MAGI Rules 2

MAGI Rules

The MAGI rules are complicated. For example, a married couple’s income can be divided into different “categories,” and the rules for each category are slightly different. For example, a husband may fall into the Category 1 Non-MAGI group while his wife falls into the MAGI Group 2. Each category has its own set of income and asset rules.

For people who need long-term care, the MAGI rules are even more complex. These rules allow Medicaid to deny LTSS if an individual or their spouse transferred assets for less than fair market value within the five-year look-back period.

Many people assume that they will not qualify for Medicaid because of their income. But that’s not always the case. Almost all states offer multiple pathways to Medicaid eligibility, including a Medically Needy Pathway. In addition, many private organizations offer services to help individuals become income-eligible for Medicaid. These companies often employ complicated techniques, such as Miller Trusts and Qualified Income Trusts, to help their clients become Medicaid-eligible.

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