Assets that are not counted and will not disqualify a Medicaid applicant from receiving Medicaid include: the residential home; personal belongings and household goods; one car; a prepaid irrevocable funeral contract with a value of $2,000 or less; a burial plot for the applicant and the applicant’s spouse; burial insurance and term life insurance; life insurance that has been assigned to cover funeral costs and irrevocably transferred to a trust, up to $6,443, and other life insurance if the face value of all policies owned to insure a particular person is $1,500 or less. This is not a complete list but it does include the most common assets not counted.
Assets that are counted include: cash, savings; promissory notes, and contract payments; equity the applicant has in real estate other than the applicant’s home; checking accounts; stock; and certain trust income.
A nursing home resident is allowed to have no more than $2,000 in countable assets at any given time to be eligible for Medicaid. In addition, if the resident is married, Medicaid will divide up the countable assets of the couple at the time one spouse enters the nursing home. The spouse who is not entering the nursing home will be able to keep the greater of either A) $16,152, or B) one-half of the assets, up to $80,760, without affecting the other spouse’s eligibility for Medicaid.
If the couple’s countable assets are more than either of these two combined limits, Medicaid will not pay for the nursing home until the excess assets are “spent down”. The excess assets can be used for nursing home care itself, and for a few other limited purposes. It is best to consult an attorney to plan how to spend assets.