Medicaid insurance does not require all of its recipients to be completely drained since certain assets will be exempted. When a person applies for Medicaid insurance, it will research and decide what will be there in countable assets, and the countable assets will be all things except for the exempt assets. This implies that Medicaid insurance will not count some assets in its checklist to see if the Medicaid applicant qualifies. The following is a list of exempted resources in assessing a Medicaid applicant’s eligibility for Medicaid nursing home services:
1. Homestead residence. The applicant’s principal place of living is an excluded resource until they wish to return home. It is not required for the Medicaid insurance applicant to prove the wish to return home. If the applicant had not lived in the house while owning an ownership interest in the property, then it cannot be exempted. But if the house is a property that is bought inside three months following the month of sale of the original home, then it can be exempted.
2. Real estate for sale. If fair efforts are done to sell the property then that resource is exempted. Real property includes undivided interests and life estates and remainder interests. Assets that cannot be sold like a timeshare can be a very hard job to sell, yet they are an asset. But If you can showcase that you have done a genuine attempt to make a sale then Medicaid cannot count it as an asset. You have to obtain a written letter from a timeshare company depicting that a genuine effort has been made to sell the timeshare and the asset can’t be sold or timeshare company will not buy it back.
3. Automobile. One automobile for the person, regardless of its value, is excluded.
4. Household goods and personal effects. Items of regular house usage like furniture, appliances or personal importance materials like clothing are excluded.
5. Burial spaces. Burial spaces dedicated to the Medicaid insurance applicant, spouse and the immediate family members are exempt from Medicaid eligibility. Spaces like a gravesite, burial plot, crypt and mausoleum and also burial space items for the Medicaid applicant and spouse are also exempt from Medicaid insurance applicants.
6. Term life insurance. Term life insurance owners cannot borrow against or surrender the life insurance policy for cash. Therefore, term life insurance cannot be counted as a resource in spite of the policy’s death benefit amount.
7. Any Other life insurance in certain situations. If the Medicaid applicant or his spouse is owning life insurance policies that have a total face value of $1,500 or less per person, then the Medicaid insurance exempts the value of such life insurance from considering as resource.
8. Fixed funeral plan. If the Medicaid or the spouse applicant has an irreversible prepaid funeral plan, then it is exempted irrespective of its value.
9. Livestock. In case the Medicaid applicant has maintained the livestock as part of a trade or business or only for home usage it’s not counted as a resource. Excluding all the other users it is regarded as countable.
10. Retirement benefits. Retirement funds such as IRAs, 401(k)s and pensions are exempted resources if they are being given in periodic payments that involve a part of the principal. Medicaid insurance does not check if the plan is in the name of the Medicaid applicant or the spouse. But, if the retirement plan is not accessible for removal, then such assets are excluded for Medicaid eligibility purposes. If you need a loan to access the funds, if the employment is terminated or any hardships that are duly given approval by the plan supervisor, then such funds are exempted.
11. Rental or Income producing property – Non-residential property that is rented out will not be exempted to consider as an asset. But, the income from this property will be counted as an asset.
12. Business property essential to self-support. If the Medicaid applicant has a property that is very much for personal support and that is in a person’s trade or business then it is excluded from resources regardless of the rate of return.
Rules for Spouses:
Medicaid rule states that the community spouse is ok to keep one-half of countable assets with a maximum value of $126,420. If the community spouse’s assets are not equal to a minimum of $25,284, then the community spouse is able to retain the assets from the spouse until the minimum value is attained.
Community spouse depletion protection: The community spouse can keep part of the institutionalized spouse’s income if the community spouse has a monthly income of less than $2,057.50. The maximum amount of income that is allowed to retain its $3,160.50 dependent on individual living expenses.
A note on countable assets:
Primarily, all the cash and property or any item that can be valued and converted into cash, is a countable asset regardless it comes among the list of those assets listed above. Below are the countable assets for your understanding:
1. Life Insurance Policies: If the burial exclusion maximum has been touched with other assets then the cash value of whole life or any other life insurance policies is counted as a resource.
2. Bank and Investment Accounts: Stocks, Bonds, Mutual Funds, Certificates of Deposit, Checking Accounts, Savings Accounts, Money Market Accounts, and Brokerage Accounts.
3. Other Assets: Non-home place property and land, automobiles in addition to the 1 exempted vehicle, recreational purpose vehicles, timeshares that are not attempted to sale and other investment properties.
While the Medicaid rules themselves are complicated and tricky, for a single person it is safe to say that he or she will qualify for Medicaid as long as the total assets are either exempt or are less than the specified value of 2000$ as in the eligibility criteria.If you have any doubts or queries regarding Medicaid exemptions or eligibility or if you need to get your Medicaid insurance started, get in touch with Plan Right Law in Utah.