Medicaid Exempt Assets
Under Medicaid, the combined assets of spouses are available for the care of the ill or “institutionalized” spouse, regardless whose name those assets are in. Nevertheless, many assets or “resources” are exempt from Medicaid when there is a spouse at home (the “community spouse”). Some of these are:
- The home up to a value of $955,000
- $75,000 to $137,000 in resources
- One automobile
- Prepaid funeral and burial for applicant and spouse
- Household furniture, personal effects, jewelry
- IRA’s, 401(k)’s, 403(b)’s, and other qualified plans
Since the home is an exempt asset when a spouse is living there, so are repairs and improvements to the home, including new carpeting, appliances, kitchen, baths, modifications for handicapped accessibility, lifts for stairs, etc. A mortgage can be paid off to reduce the amount of assets required to be “spent down” in order to obtain Medicaid eligibility. Although only one automobile is allowed, nothing prevents the spouse from trading in the old clunker for a brand new car.
When there is no spouse, the resource allowance falls to about $17,000. The home and automobile, no longer needed by the applicant, are no longer exempt. Nevertheless, the home may still be protected if an adult child was living in the home and caring for the parent for the two year period immediately prior to the parent entering the nursing home.
Clients often ask whether Medicaid can “go after” the assets when the community spouse dies after the institutionalized spouse. If the assets were exempt, then Medicaid has no “right of recovery”. In other cases, such as where there is no spouse, consultation with an elder law attorney may be needed to avoid estate recovery.