What Does Medicaid Consider an Available Asset When Determining Medicaid Eligibility?

What Are Available Assets Under Florida Medicaid?

Under Florida Medicaid, when determining eligibility for programs like long-term care, certain assets are considered “available” and thus count towards eligibility limits. 

What Assets Does Medicaid Exempt from Consideration?

Medicaid exempts certain assets from consideration when determining eligibility for its benefits. A primary residence, for instance, is typically exempt, allowing individuals to maintain homeownership while receiving Medicaid benefits. Additionally, applicants are typically entitled to own a car, and even a second one if it’s over seven years old but under twenty-five years old.

Other exempt assets may include:

  • Term life insurance policies
  • Prepaid, irrevocable burial or cremation contracts
  • Household goods and personal effects
  • Wedding and engagement rings
  • Up to $2,500 in a designated burial account

How Does Medicaid Treat Life Insurance?

If your life insurance has a face value over $2,500, its cash value could be considered in the $2,000 asset limit ($154,140 for a spouse). 

Are Retirement Accounts Counted as Assets?

This is a nuanced area. Typically, we structure retirement accounts as income streams, which leads Medicaid to treat them as income, not as a countable asset. 

What Other Assets Does Medicaid Consider Available?

Beyond the exempt assets, Medicaid considers most other assets as available resources. This may include:

  • Cash and Bank Accounts. This includes checking and savings accounts, as well as cash on hand.
  • Investments. Stocks, bonds, mutual funds, and other investment accounts are counted as available assets.
  • Real Estate. Other than the primary residence, additional real estate holdings are typically considered available assets. The primary home may be exempt under certain conditions.
  • Vehicles. While one vehicle may be exempt (and potentially a second car if it is over seven years old (but under twenty-five years old), additional vehicles could be counted as assets.
  • Life Insurance Policies. The cash value of life insurance policies might be considered an asset, particularly if the total face value of all policies exceeds a certain limit.
  • Retirement Accounts. Depending on the state and circumstances, retirement accounts like IRAs and 401(k)s might be counted. In some cases, these can be structured as income streams, which may alter how they are assessed.
  • Additional Personal Property. Other valuable personal property, like jewelry, art, or collectibles, can be considered available assets.
  • Trust Funds. Assets in a trust can be considered available if the individual has access to them.
  • Transferred Assets. Assets that were given away or sold under market value during the Medicaid look-back period can also impact eligibility.
  • Other Non-Exempt Assets. This category can include any other assets not specifically exempted by Medicaid rules.

It’s important to note that Medicaid rules and exemptions can vary by state, and there are often specific guidelines for evaluating these assets. For precise information and guidance, it is advisable to consult with a Medicaid planning lawyer or elder law attorney in your specific state. 

How Can I Protect My Assets and Still Qualify for Medicaid?

At Flammia Elder Law Firm, we help you navigate these waters. Strategies that often utilized to qualify for Medicaid may include:

  • Understanding Exempt and Non-Exempt Assets. First, it’s important to know which assets Medicaid considers exempt (not counted) and non-exempt (counted). For instance, a primary home, one car, and certain types of personal property are often exempt.
  • Spend Down Assets. This involves using non-exempt assets for acceptable expenses, like paying off debt, home modifications for accessibility, purchasing an exempt asset (like a car or home repairs), or prepaying funeral and burial expenses.
  • Asset Conversion. Convert non-exempt assets into exempt assets. For example, using cash (a countable asset) to pay off a mortgage on a home (an exempt asset).
  • Set Up Trusts. Certain types of trusts can help protect assets. An Irrevocable Trust can shield assets, but it must be structured correctly to comply with Medicaid’s look-back period. Assets placed in such a trust are no longer considered yours, and thus not countable by Medicaid after five years.
  • Purchasing Annuities. In some cases, purchasing an annuity can convert assets into an income stream, which may help in meeting Medicaid’s income requirements. However, the annuity must be irrevocable, non-transferable, equal in payments, and Medicaid-compliant.
  • Medicaid Asset Protection Trusts. These are specific types of trusts designed to protect a home or other assets from being counted by Medicaid. They must be set up and funded well in advance of applying for Medicaid due to the look-back period.
  • Caregiver Agreements. If a family member is providing care, a formal caregiver agreement can be established, allowing the transfer of money to the caregiver in a way that Medicaid recognizes as a legitimate expense.
  • Medicaid Compliant Promissory Notes or Private Annuities. These financial tools can be used to loan money to family members in a Medicaid-compliant way.
  • Life Estate. Involves retaining the right to live in your home until death, after which the home passes to the remainderman (usually a child). 

How Can Flammia Elder Law Firm Assist With Florida Medicaid Planning?

Understanding Medicaid’s view on assets is crucial for eligibility. Our dedicated Medicaid planning attorneys provide tailored strategies to navigate Medicaid’s complex rules. Whether it’s asset protection, application filing, or comprehensive Medicaid planning, we’re here to help.

If you’re facing these questions and need experienced guidance, contact us at Flammia Elder Law Firm to schedule a consultation. Let us work with you to ensure your assets are protected while securing the Medicaid benefits you deserve.

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