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

In order to understand Medicaid qualification, you first need to know Medicaid treats your assets.

Basically, Medicaid breaks your assets down into two separate categories. The first are those assets which are exempt and the second are those assets which are non-exempt or countable.

Exempt assets are those which Medicaid will not take into account (at least for the time being). While the laws in New Hampshire and Massachusetts differ in some respects, generally the following assets are exempt:

• The home, no matter its value, but only in the case of a married couple. In the case of a single person, the home must be the principal place of residence.
• Household and personal belongings, such as furniture, appliances, non-investment 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 it does exceed $1,500 in total face amount, then the cash value in these policies is countable. Also, term life insurance is exempt.
• Cash (e.g. a small checking account or savings account) not to exceed $2,500 in New Hampshire or $2,000 in Massachusetts.

These are basically the assets which Medicaid will ignore, at least for now. Keep in mind, however, that the estate recovery unit may come back to recoup payments made to a medicaid recipient after the death of the recipient and the recipient's spouse if they are married.

All other assets which are not exempt (i.e. the ones not listed earlier) 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 minor exceptions to these rules, there are 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 exempt.

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 one exempt assets plus a small amount of cash, (i.e. $2,500 in New Hampshire and less than $2,000 in Massachusetts).

For a married couple the community spouse (i.e. the one not needing nursing home care) can generally keep, in New Hampshire, one-half of the assets up to a maximum of just under $87,000. In Massachusetts the spouse can keep the first $87,000. 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 Times is designed to review the basics in a way which a caseworker from the Department of Health and Human Services in New Hampshire or the Division of Medical Assistance in Massachusetts would do so.

Other issues of this newsletter have covered ways that married couples can often protect all of their assets (Elder Law Times, April and June 2001). If you would like back copies of any of these issues, please give us a call at 800-370-5010.

Future issues will be dealing with related topics covering additional Medicaid planning strategies, including the way that single people can often protect 50% or more of their assets, as well as nursing home selection and care issues.

See March 2001 Issue of Elder Law Times