Non-Exempt vs. Exempt Assets for Medicaid

Non-Exempt vs. Exempt Assets for Medicaid

Determining Medicaid eligibility for long-term care comes with a significant income and asset cap. This can be difficult for those whose assets are too valuable yet they cannot afford expensive nursing home care on their own.

Before you sell your house to pay the bills, consult an elder law and/or estate planning attorney. It is possible to “spend down” some of your assets in order to become eligible for Medicaid. However, both Medicaid and MassHealth have a five-year “look back” period designed to reserve assistance for those who really need it.

All Medicaid programs, including MassHealth, require restricted assets or income, and in some cases, both.

Exempt Assets for Medciaid Eligibility

Exempt assets will not be counted when determining your eligibility for Medicaid.

  • Your home may be exempt. If you enter a nursing home with “the intent to return home,” and your home is under the equity limits, it will not count against your assets. If your spouse, minor or special-needs child is living there, it is automatically exempt. There is also an exception for adult child caregivers: if the adult child lived in the home for at least two years prior to the parent entering a nursing home, you can convey the house for a nominal value and it will not be subject to the “look back” penalty.
  • Your car or cars. A car of “reasonable” value (that is, not a Ferrari or other high-value vehicle) is exempt from the asset tally, as is a second car seven years or older.
  • Personal property. Your personal possessions do not count against the limit, but if you suddenly purchase the Hope Diamond, that will send up red flags.
  • Home improvements. From new roofs to wheelchair ramps, these do not count against your assets.
  • Prepaid funeral plans. Pre-paid funeral plans will not count as an asset.
  • Rental or income-producing property. These do not count as assets, but the income generated does.
  • Life insurance. The cash value of any life insurance contract will be counted as an asset. Term insurance does not count because the value or death benefit only comes after you pass away.
  • 401(k) and other retirement accounts. Depending on how your retirement accounts are structured and if you are still working, these may be excluded.
  • Assets that cannot be sold. Any asset (such as a timeshare) that can’t be sold after a reasonable, good-faith effort will not count against your Medicaid eligibility.

Medicaid and MassHealth rules are often confusing, and with so much on the line, it makes sense to consult an attorney. If you have questions about your estate and Medicaid eligibility, call a lawyer today.

About Baker Law Group P.C.

Baker Law Group, P.C. offers skilled elder law assistance and free initial consultations. Contact us if you or a family member are concerned about financially planning for a potential or imminent MassHealth/Medicaid need.

Our Massachusetts elder law attorneys have years of experience creating elder estate plans in the many towns within Middlesex, Norfolk, Plymouth, Worcester and Suffolk Counties. Let our attorneys assist you in planning your future when you contact us today.

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