What Assets Can You Keep on Medicaid?

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December 3, 2020 Medicaid Planning

In addition to Medicaid’s income restrictions and non-financial requirements, applicants must also meet specific asset limitations. In fact, the asset qualification is typically the hardest for applicants to meet. Fortunately, not all of your assets are countable for Medicaid purposes. You can keep certain exempt assets while still qualifying for Medicaid.

Read More: What are the Medicaid Lookback and Penalty Periods?

Most Common Exempt Assets

As long as the Medicaid applicant meets the asset requirement for their countable assets, they can retain their exempt assets. That said, it’s important to note that some of these assets contain value limitations. Some of the most common assets that are exempt for Medicaid purposes include:

Your Primary Residence

The primary home is exempt in almost every case. Exceptions exist in cases involving a single person when there is no minor or disabled child living in the home AND the Medicaid applicant’s equity in the home exceeds the state-specific limitation, which is between $595,000 and $893,000 in 2020.

One Vehicle

Since one vehicle of unlimited value is exempt from Medicaid, some individuals may choose to upgrade their vehicle as part of their spend-down plan. This can help spend excess countable assets and aid in accelerating your eligibility for benefits.

Personal Effects & Household Items

Your clothing, furniture, electronics, and other personal items are also exempt from Medicaid. Exceptions may include collections that contain a sizeable cash value. Similar to upgrading a vehicle, some individuals may choose to upgrade their personal items as part of their spend-down plan.

You May Also Like: How to Spend Down Assets for Medicaid

Life Insurance

A life insurance policy is exempt for Medicaid purposes as long as the face value is below your state-specific limitation.

Funeral Expense Trust

An irrevocable funeral expense trust is exempt for Medicaid purposes as long as the face value is below your state-specific limitation.

Some IRAs

The classification of an IRA as an exempt or countable asset differs depending on your state. In some states, IRAs belonging to either spouse are considered exempt. In other states, an IRA belonging to the healthy spouse is considered exempt, while the ill spouse’s IRA is considered countable. Most states, however, classify IRAs belonging to both spouses as countable assets.

Other than what’s mentioned above, almost all other assets fall into the countable category. This includes checking and savings accounts, stocks, bonds, mutual funds, additional real estate and vehicles, and more.

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