Medicaid Planning with retirement/pre-tax IRA accounts can be confusing, especially because each state treats these accounts a little differently. While there is nothing in the federal rules which protects/exempts qualified accounts, some states do not count them towards qualification at all or do not count them if the applicant (or spouse) receives either monthly payments from the IRA (the RMD in monthly installments) or other qualified funds.
When it comes to qualified retirement accounts and Medicaid planning, State Medicaid agencies take one of the following three positions:
Completely exempt the IRA (non-countable)
Consider the IRA exempt if IRA owner is receiving RMD/regular systematic payments
Completely count the IRA as an available resource/asset (countable)
To make things even more confusing, the State Medicaid agency may treat the institutionalized spouse (“IS”) qualified account differently than the community spouse (“CS”)’s qualified account. For example, Wisconsin and Pennsylvania considers the CS’ account to be exempt but counts the IS’ retirement account as a countable resource.
To help you understand how your state treats these accounts, we’ve included maps below:
IS’ RETIREMENT ACCOUNTS – COUNTABLE OR EXEMPT
CS’ RETIREMENT ACCOUNTS – COUNTABLE OR EXEMPT