What Assets Count for Medicaid? A Family’s Guide to Nursing Home Eligibility

When a loved one suddenly needs nursing home care, families often face two urgent questions at once: How will we pay for care, and could Medicaid help?

Medicaid eligibility involves more than the amount in a bank account. Long-term care Medicaid has financial eligibility rules involving both income and resources, and the treatment of individual assets can vary by state, marital status, ownership, and other circumstances.

One of the first things to understand is which assets Medicaid counts.

Does Medicaid Look at Assets, or Just Income?

Medicaid may look at both, but income and assets are different.

Income is money received during the month, such as Social Security, pension payments, or certain retirement-account distributions.

Assets, also called resources, are things a person already owns, such as money in a savings account or investments.

For someone seeking long-term care Medicaid, the issue may be income, assets, or both. Reviewing both helps determine where an eligibility issue may exist.

What Are Countable Assets for Medicaid?

Countable assets are resources that Medicaid includes when determining financial eligibility. Common examples include cash, checking and savings accounts, certificates of deposit, stocks, bonds, brokerage accounts, additional real estate, and certain annuities or cash-value financial products.

Whether an asset is countable can depend on ownership, accessibility, state law, and the Medicaid program involved. A jointly owned account, for example, should not automatically be assumed exempt just because another person’s name appears on it.

Not everything a person owns is countable. Some resources may be excluded or exempt under the rules.

Start With a List of the Applicant’s Finances

A Medicaid case cannot be evaluated accurately from one account balance. Before making financial changes, take a complete inventory of the applicant’s resources and how each asset is titled.

Gather information about:

• Home and other real estate

• Vehicles

• Checking and savings accounts

• Certificates of deposit

• Brokerage and investment accounts

• IRAs, 401(k)s, and other retirement accounts

• Life insurance

• Annuities

• Funeral or burial arrangements

• Transfers, gifts, or large withdrawals

Recent statements and transaction records can help fill in the details. Those records help identify which assets may be countable, which may be exempt, and which require state specific analysis.

What Assets Are Exempt From Medicaid?

Families often ask what assets can you keep when you go on Medicaid.

Some property may be excluded from the Medicaid resource calculation. Depending on the state and the facts of the case, this can include a primary residence, personal belongings, one vehicle, and certain funeral or burial arrangements.

A home is often an applicant’s largest asset. The value of the property and the use of the home can affect how it is treated. Whether a spouse or another protected person lives there can matter as well.

Eligibility rules and estate recovery should be considered separately.

An asset being exempt for eligibility purposes does not mean the asset is protected. Estate recovery and liens are separate issues. After a Medicaid recipient dies, the state may be required to recover certain Medicaid benefits from the estate. There are rules limiting when recovery can occur, including protections for some surviving family members and undue hardship.

Does an IRA Count as an Asset for Medicaid?

Since treatment differs across the country, we often get the question, does an IRA count as an asset for Medicaid? There is no single nationwide answer for every IRA, 401(k), or other retirement account.

The type of account and its ownership matter. Whether it is in payout status may also affect whether it is a countable asset or able to be exempted.

Before liquidating a retirement account, changing its payout structure, or taking a large withdrawal, families should understand both the Medicaid consequences and any potential tax consequences.

What If Someone Has Too Many Assets for Medicaid?

Most long-term care Medicaid programs have resource limits, also called Medicaid asset limits. Being over the Medicaid resource limit does not mean you cannot qualify; it may just mean planning is needed before an application is filed.

Giving money away is not the same as using assets for legitimate expenses. Funds might be used for care costs, debts, home repairs, personal needs, legal services, funeral planning, or other allowable expenses for a Medicaid spend down. In some cases, a Medicaid-compliant annuity or another planning strategy may also be considered.

Families should avoid transferring property or writing checks to relatives to reduce assets. Transfers can create Medicaid eligibility issues and unintentionally create penalties to deal with down the road.

Do Not Assume Your Loved One Cannot Qualify

Owning a home, having retirement savings, or being over a Medicaid asset limit does not automatically mean Medicaid is unavailable.

Before spending down savings, giving assets away, changing ownership, or assuming a loved one cannot qualify, have the complete situation reviewed by an experienced elder law attorney.

AshBer works with elder law attorneys, helping to analyze financial details and planning options. If your family needs help finding an experienced elder law attorney to review your situation, contact us. We can help connect you with an attorney who handles Medicaid planning in your state.

This article is intended for general educational purposes and is not legal or tax advice. Medicaid rules vary by state and may change. Families should consult an experienced elder law attorney regarding their specific circumstances.