Understanding Medicaid Exempt Assets

Knowledge of how Medicaid works is important when you are planning for your future, or the care of a loved one.

Medicaid is a federal program that is managed and operated at the state level. While each community has services to support the elderly or impoverished, Medicaid is intended to assist with medical care, including skilled nursing in a long-term care residence, center, or institution. The program is an important resource for people of all income levels when they need long-term care.

Medicaid can help you and your family

While you may have spent a lifetime earning, saving, and building for the future, the cost of residential nursing care can be $150,000 and up per year. Medicaid is an essential resource available to you and others who are aging into the need for more care or medical service than you may be able to receive at home.

Depending on your situation, planning for help through Medicaid can be complicated. We regularly work with clients to create a legal plan that helps avoid leaving a spouse or family impoverished when skilled nursing care is needed. An important part of planning is knowing about assets that are exempt when your eligibility for Medicaid is calculated.

What assets are exempt from Medicaid benefits calculations?

If your long-term care financial planning does not align with Medicaid requirements, you could quickly exhaust your lifetime savings. Planning for Medicaid eligibility allows you to preserve your estate, and the well-being of a spouse still living at home if either of you should enter a nursing home.

When you apply for Medicaid, a calculation is performed using financial information that you provide. The program takes into consideration your resources to decide if you qualify, and your monthly income to determine how much you will have to contribute toward your long-term care on a monthly basis once you get approved for Medicaid benefits. .

Medicaid considers almost all of your income and assets to be eligible and available to pay for nursing home care. Assets include savings, brokerage, investment, and other accounts, real property, commercial assets, and other accounts and objects of value.

When determining your Medicaid benefit eligibility, the program does not take into account certain assets and the value of those assets. These exempt assets are intended to avoid impoverishing a spouse who may still be living in the community. Assets exempt from Medicaid calculations include:

  • Your personal, primary residence is not included when considering your assets for eligibility for Medicaid. Despite that, high home equity could trigger denial of eligibility by Medicaid.
  • One vehicle is exempt.
  • Pre-paid burial contracts, or up to a certain value set aside for burial arrangements, remain exempt.
  • Life insurance policies with a face value under a certain value are exempt.
  • Medicaid considers household goods and personal belongings exempt.
  • Value and assets held in certain types of trusts and qualified plans are exempt.
  • Reparation payments received as a result of Nazi persecution

A spouse still living at home is allowed some income or allowance as well as a portion of their marital assets when their partner enters a nursing facility. Plus, state guidelines should be considered when working through Medicaid eligibility planning.

Speak with an experienced New York and New Jersey estate and Medicaid planning attorney

Planning now for Medicaid eligibility is an important way to take care of your future and your family. Located in midtown Manhattan, Lissner & Lissner LLP has been helping individuals and families for more than 65 years. Contact us or call (212) 307-1499 when you have questions about Medicaid, estate planning, or elder law.

Micheal Lissner
About the Author: Michael Lissner
Micheal D. Lissner is an experienced trust and estate planning and administration attorney serving the New York City area. He handles cases ranging from estate planning to trust administration, medicaid planning, elder law, and representation of survivors of the Holocaust and their heirs