Last week we discussed what it takes to meet the Income Test to qualify for Medicaid. This week we will address what it takes to meet the Asset Tests to be able to obtain Medicaid benefits.
There are two types of assets: Exempt and Non-exempt assets. The Idaho Department of Health and Welfare refer to “assets” as “resources.”
Medicaid applicants, who are single, are treated differently than married persons.
What is the Asset Test for a Single Person who is applying for Medicaid?
First consider the exempt assets. What are they? A single person can have the following assets:
•One residence and the contiguous land with a maximum value of $750,000. This can be a farm, so long as the land is contiguous. Frequently the valuation can be proved by providing the county tax assessment statement.
•One vehicle of an unlimited value.
•“Stuff” in the home.
Prepaid irrevocable funeral plan or $1500 in an account identified for a “burial fund.” If the burial/funeral plan is “irrevocable,” that means the day of the funeral the family cannot ask for a lower cost funeral and be reimbursed the excess funds that were prepaid.
•Funeral plots for family members.
Retirement accounts, so long as the Medicaid applicant is taking the minimum distribution required. If the Medicaid Applicant is under age 70.5, there are different rules that apply.
•Less than $2,000 of other non-exempt assets, such as cash in a checking account, a 2nd car, a vacation home, certificates of deposit and all other non-exempt assets.
There are a number of other assets that can be owned by a single person and that single person will still qualify for Medicaid. The information presented in this article is intended as general information. If you have specific questions about your circumstances, it is recommended you contact a professional for legal advice.
Once a single person has the allowed exempt assets and has less than $2,000 in non-exempt assets, they will meet the Medicaid Asset Test.
The list of non-exempt assets is everything that is not an exempt asset. This list can include, but is not limited to the following:
•Real property that is not the primary residence
•Bank accounts, certificates of deposit, investments, brokerage accounts, and retirement accounts that are not subject to minimum distribution rules
•Cash surrender value of life insurance
•Other cars and trucks after taking into account the primary vehicle, which is an exempt asset.
•Boats, motorcycles and other expensive “toys.”
What is the Asset Test for a Married Person who is applying for Medicaid?
The exempt asset test is slightly different than the test for a single person applying for Medicaid. The healthy spouse of the married couple (often referred to as the “community spouse”) is entitled to keep the following assets:
•One residence and the contiguous land with no limit for the value.
•One vehicle of an unlimited value.
•“Stuff” in the home.
•Prepaid irrevocable funeral plan for both spouses or have a burial account of $1500 set aside for each spouse.
•Funeral plots for family members
•Retirement accounts for the Medicaid applicant so long as the applicant is taking the minimum annual distribution.
•All the retirement accounts of the healthy spouse.
•One half of the other non-exempt assets but
•No more than $109,560 (+$2,000) = $111,560 and
•No less than $21,912 (+$2,000) = $23,912.
The non-exempt assets include separate as well as community property owned by either spouse. These non-exempt assets include but are not limited to:
•All assets, including a home, titled in the name of a revocable trust in which either spouse has an interest.
•Real property that is not the primary residence of the parties.
•Bank accounts, certificates of deposit, investments, brokerage accounts, and retirement accounts of the Medicaid applicant that are not subject to minimum distribution rules
•Cash surrender value of life insurance
•Vehicles other than the one vehicle claimed as an exempt asset.
•Boats, motorcycles and other expensive “toys.”
So how do you calculate the total value for non-exempt assets for a married couple?
Start with the “snap shot” date. This is the first day the Medicaid applicant was continuously in a nursing home or assisted living facility for thirty (30) days, or is expected to be in for thirty (30) days or a Registered Nurse administers the Universal Assessment Instrument (UAI) to the individual and finds that the Medicaid applicant meets the required level of care to qualify for Medicaid.
First identify the fair market value of all the exempt and non-exempt assets on the “snap-shot” date. The assessment values assigned by each Idaho county for real estate tax purposed in Idaho can be used as the fair market value for the real property.
Next blog will be on how to meet the asset test if you have to many non-exempt assets.