What Assets Are Exempt from Medicaid? Here’s The List, Benefits, Rules & Types

An infographic of What Assets Are Exempt from Medicaid
An infographic of What Assets Are Exempt from Medicaid

Medicaid is a health insurance program for low-income individuals and families who meet certain eligibility criteria.

It covers various medical services, such as doctor visits, hospital stays, prescription drugs, and long-term care.

However, to qualify for Medicaid, applicants must have limited income and assets.

Assets are the things that a person owns, such as money, property, or investments.

Some assets are counted by Medicaid, while others are exempt.

Exempt assets are the ones that do not affect Medicaid eligibility and do not have to be spent down or sold.

In this article, we will explain what assets are exempt from Medicaid and why they are important.

What are the Benefits of Exempt Assets?

Exempt assets are beneficial for Medicaid applicants and recipients for several reasons.

Some of the benefits are:

  • They allow applicants to keep some of their personal and financial resources without losing Medicaid eligibility.
  • They protect applicants from having to sell or give away their assets to qualify for Medicaid.
  • They preserve applicants’ quality of life and dignity by allowing them to maintain their homes, cars, and personal belongings.
  • They enable applicants to plan for their future and leave something for their heirs.

What are the Rules and Limits for Exempt Assets?

These are some general guidelines that apply to most states and programs:

  • The value of the exempt assets is not counted towards the Medicaid asset limit, which is usually $2,000 for an individual and $3,000 for a couple.
  • The ownership of the exempt assets must be in the name of the applicant, the applicant’s spouse, or a joint owner.
  • The use of the exempt assets must be for the benefit of the applicant, the applicant’s spouse, or a dependent.
  • The transfer of the exempt assets must not be done to qualify for Medicaid, or else it may incur a penalty period of ineligibility.

What are the Types of Exempt Assets?

Many types of assets are exempt from Medicaid, depending on the state and the program.

However, some of the most common and universal types of exempt assets are:

Asset Exemption Criteria
Home Primary residence of applicant or spouse, or occupied by dependent, sibling, or caretaker child. May become countable if the owner dies or moves out unless there is a survivor or sibling with equity.
Car One car or truck used for transportation by applicant, spouse, or dependent, or for medical, employment, or home maintenance purposes. Additional cars with low value (<$4,500).
Personal Property Items used for personal or household use, regardless of value. Antiques, collectables, or art may be countable if high value or not used.
Life Insurance Term policies with no cash value are always exempt. Whole policies with face value and cash value < $1,500 are exempt. The excess amount is countable.
Burial Funds Funds up to $1,500 are designated and irrevocable for the funeral expenses of the applicant or spouse. Funds may also be exempt if funded by life insurance policies that meet exemption criteria.
Retirement Accounts Exemption depends on the state and program. Some states exempt all accounts in the name of the applicant or spouse. Others exempt accounts in payout status, but count distributions as income. Some states exempt accounts up to $100,000.

A Table of the Types of Exempt Assets

Conclusion

Medicaid is a health insurance program for low-income individuals and families who need medical assistance.

To qualify for Medicaid, applicants must have limited income and assets.

However, not all assets are counted by Medicaid.

Some assets are exempt and do not affect Medicaid eligibility.

Exempt assets include the home, the car, personal property, life insurance, burial funds, and retirement accounts.

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