Financial Requirements — Assets
When the state determines your financial eligibility for Medicaid some of your assets are counted, while others are excluded. During the Medicaid application process, you will have to provide documentation of what assets you have. While Medicaid’s assessment of your income is relatively straightforward, the assessment of your assets can be fairly complex, depending on how much and what kind of assets you have.
Assets that are usually counted for eligibility include:
- Checking and savings accounts
- Stocks and bonds
- Certificates of deposit
- Real property other than your primary residence
- Additional motor vehicles if you have more than one.
Assets that do not get counted for eligibility include the following:
- Your primary residence
- Personal property and household belongings
- One motor vehicle
- Life insurance with a face value under $1,500
- Up to $1,500 in funds set aside for burial
- Certain burial arrangements such as pre-need burial agreements
- Assets held in specific kinds of trusts. See “Trusts” for more information about how a trust can affect your eligibility for Medicaid.
Limits on Home Equity
When determining eligibility for Medicaid your home, regardless of its value, is exempt from being counted as a resource as long as it is your principal place of residence. But, your home can affect whether Medicaid will pay for your long-term care services, including nursing home care and home and community-based waiver services.
If your equity interest in the home exceeds a certain level, Medicaid cannot pay for your long-term care. The equity value of your home is the fair market value (that is, what you could sell it for on the open market) minus any debts secured by the home, such as a mortgage or a home equity loan. For example, if your home has a fair market value of $300,000 and an outstanding mortgage of $100,000, the equity value is $200,000.
But your equity interest, which is what is important, depends on whether you own the home by yourself or with someone else. In our example, if you own the home by yourself, your equity interest is the entire equity value of $200,000. If you own your home jointly with your spouse or someone else, though, your equity interest is only half of the home’s equity value, or $100,000.
In 2013, the minimum home equity limit is $536,000. In other words, your must have more than $536,000 in equity interest in your home before Medicaid must deny payment for your long-term care services. However, states have the option of using a higher limit, which can be as high as $802,000 in 2013. Most states have chosen to use the lower limit but some states, especially in parts of the country where housing is expensive, use the higher amount. These limits are adjusted each year to account for inflation.
There are some exceptions to this rule. If your spouse or your child who is under 21 or blind or disabled lives in the home, this rule does not apply. Also, the state can choose not to apply this rule if it determines that applying the rule would be an undue hardship.
Other Important Considerations:
- Unless specifically excluded any other real property, such as a vacation home, that you and your spouse own is counted as an asset in the Medicaid eligibility determination
- The full value of an asset that you own jointly with someone else may be counted as belonging entirely to you when the state determines your Medicaid eligibility. For example, a jointly owned checking or savings account would be considered to be entirely your asset since either you or the other owner can withdraw all of the funds in the account.
- The amount of countable assets you can have and still qualify for Medicaid varies from state to state. In most states you can retain about $2,000 in countable assets, and married couples who are still living in the same household can retain about $3,000 in countable assets. This may not sound like much, but remember that many assets are not counted at all when determining your eligibility.
- If one spouse lives in an institution and the other lives in the community, the community spouse is allowed to keep more of the couple’s assets without disqualifying the spouse in the institution from Medicaid coverage. In addition, the community spouse may be able to have some of the institutionalized spouse’s income set aside for his or her use. See “Considerations for Married People” for more information about how income and assets can be protected for a community spouse.
Good To Know
More about eligibility requirements and how to apply can be found on the Medicaid.gov website.