A common misconception concerning Medicaid is that you cannot obtain coverage if you own a home or have other assets. This is not the case. While the rules concerning what assets are permitted under Medicaid can be very complicated, there are many rules, requirements, and limitations.
What is Medicaid?
Medicaid is a health insurance program that is jointly funded through federal and state laws and programs. The program is primarily for low-income and disabled individuals. It provides coverage for the elderly, children, and those who have disabilities such as blindness and other disabilities.
Approximately thirty-two states provide Medicaid to people approved for Social Security Disability Insurance (SSDI) benefits. However, there are a few requirements and restrictions concerning what assets you can own to be eligible for Medicaid. These rules differ from state-to-state.
Qualifications
In all states, Medicaid provides health coverage for some low-income people, families, and children, pregnant women, the elderly, and people with disabilities. In some states, the program covers all low-income adults below a certain income level.
Assets
You can own a variety of assets and still be eligible for Medicaid. Let’s take a look at what you can and cannot own.
Real Property
If you own a home you can still qualify for Medicaid. The general rule for real estate is that the property must be valued at $500,000 or less at the time that you apply to be eligible for the property exclusion. In certain states, the exception is $750,000.
Cash
The maximum amount of cash that a person can have and still be eligible for Medicaid is $2,000. There are a handful of states that have different a threshold. It is essential to understand that Medicaid has stringent rules concerning asset transfers. Often people will try to dispose of cash in order to qualify for Medicaid. However, doing so can lead to you being deemed ineligible. The general rule of thumb is that you cannot make an asset or cash transfer for less than fair market value or in the past five years of your application.
Personal Property
Federal law provides rather generous exceptions when it comes to owning personal property. In general, federal law permits the ownership of any personal property that is essential to self-support, regardless of its value. The rules also allow for an exception of rental income and real estate investments so long as the income generated is necessary for self-support.
Motor Vehicles
There used to be threshold limits concerning motor vehicles, the current laws permit the applicant to own one vehicle of any current market value.
Life Insurance
Term life insurance is excluded and is not counted as an asset when applying for Medicaid. However, if you have a whole-life policy that has a cash value, it is counted, and can affect eligibility.
Pre-Paid Funerals
If you have a pre-planned/paid funeral plan or a memorial arrangement, it is excluded from your assets. This means that the entire value of the arrangement will not count against you when you apply for Medicaid. If you do not have such a plan, you can still maintain a separate bank account containing up to $1,500 for funeral expenses. This account will not count towards your cash limitations. Additionally, ownership of any cemetery plots is also excluded.
Obtaining Medicaid coverage can be complicated, confusing, and challenging. Don’t go at it alone. We at Gentreo can help you.
For more information, contact us at Gentreo.com. We can help you create a simple and affordable health and estate plan, and a safe place to store it.
Gentreo is not a law firm or a substitute for a law firm or attorney or an attorney’s advice or recommendations.
