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The Basics of Medicaid "... or what you can and cannot keep"

The first step to understanding how you qualify for Medicaid, is to understand how Medicaid treats your assets. Since the Medicaid applicant can have no more than $2,000 in his/her name in order to qualify, determination of what assets are countable is very important.

Basically, Medicaid (MassHealth here in Massachusetts) breaks your assets down into two separate categories, ether “countable” or “non-countable.”

Non-countable assets are those which Medicaid will not consider (at least for the time being) when computing your total assets. Generally the following assets are non-countable:

• The home, up to $750,000 in equity, but the home must be the principal place of residence.
• Household and personal belongings, such as furniture, appliances, jewelry and clothing.
• One vehicle
• Prepaid funeral plans and burials plots. The funeral plan must be irrevocable.
• Cash value of life insurance policies, as long as the face value of all policies added together does not exceed $1,500. If they exceed $1,500 in total face amount, then the cash value in these policies is countable. Also, term life insurance is exempt.
• Cash not to exceed $2,000.

Basically, these are the assets which Medicaid will ignore, at least for now. Remember, however, that the estate recovery unit may come back to recover payments made to a Medicaid recipient after the death of the recipient.

All other assets are countable. This includes checking accounts, savings accounts, certificates of deposit, money market accounts, stocks, mutual funds, bonds, IRAs, pensions, second cars and so on. While there are some exceptions to these rules, there are also special rules as to some joint assets. For the most part, all money and property, as well as any item that can be valued and turned into cash is a countable asset, unless it is one of those listed earlier as non-countable. While the Medicaid rules themselves are complicated and somewhat tricky, for a single person it's safe to say that you will qualify for Medicaid so long as you have only exempt assets plus a small amount of cash.

For a married couple, the community spouse (i.e. the one staying at home) can generally keep a maximum of $99,500. Of course, this does not mean there are not things which can be done to protect assets beyond these levels. Instead, this issue of Elder Law Advisor is designed to review the basics in a way which a caseworker from the Division of Medical Assistance in Massachusetts would do. Other issues of this newsletter have covered ways that married couples can often protect all of their assets.