THE BASICS OF MEDICAID
What you can and cannot keep
In order to understand Medicaid (MassHealth) eligibility, you first need to know how Medicaid treats your assets. This is not always easy since the laws are constantly changing. Recent changes have made it even more difficult for a couple to preserve their assets.
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). Generally the following assets are exempt:
- The home, no matter its value. The home must be the principal place of residence. The nursing home resident may be required to show some "intent to return home," even if this never actually takes place.
- Household and personal belongings, such as furniture, appliances, jewelry and clothing.
- One vehicle, there may be some limitation on value.
- Prepaid funeral plans /accounts and burial plots.
- 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 cash value in these policies is countable. Term life insurance is exempt.
- Cash (e.g. a small checking or savings account) not to exceed $2,000.
- Business property essential to self support.
- Irrevocable Annuities which meet certain restrictions.
These are basically the assets which Medicaid will ignore, at least for now. Keep in mind, the MassHealth Recovery Unit may come back to recoup payments made to a Medicaid recipient before or after the death of the recipient. All other assets which are not exempt (i.e. the ones not listed earlier) are countable. This includes checking & savings accounts, CDs, money market accounts, stocks, mutual funds, bonds, IRAs, pensions(with limited exceptions), second cars and so on. 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 are complicated and somewhat tricky, for a single person it's safe to say that you will qualify for Medicaid so long as you only have exempt assets plus $2,000 in cash or bank accounts.
For a married couple the community spouse (i.e. the one not needing nursing home care) can generally keep countable assets up to a maximum of $109,560 (2009).This amount increases from year to year. The Medicaid applicant may keep $2,000. However, there are things which can be done to protect assets beyond these levels. This issue of Elder Helper is only designed to review the basics. Future issues will deal with related topics covering Medicaid planning strategies.
Due to fiscal constraints many of the nation's governors advised Washington that Medicaid program costs were out of hand. They called for changes in the program and the Bush Administration responded by making drastic changes.
What does this mean? It means it is now harder to protect your home and savings unless you act now to educate yourself about what legal options are available to you, before its too late.