A Medicaid professional consultant helping an elderly woman to protect her assets and money from the nursing home spend down.

Medicaid exempt assets

What are Medicaid exempt assets & moving assets for exempt asset status by Medicaid

Medicaid Spend Down of Assets, What are Medicaid Exempt Assets In order for an individual to be considered eligible for Medicaid benefits, they will be required to spend down their assets that exceed the resource allowance in the state. In most states, these assets can either be spent or re-positioned. When an asset is re-positioned, it moves from being a countable asset to an exempt asset. Medicaid exempt assets are resources that are excluded from any assets that are considered countable when determining the spend down amount for Medicaid eligibility. For a single applicant, each and every asset they own will be considered a countable asset. There are many forms of countable assets, so individuals must be aware of what they own and how that could affect their eligibility in the future. For example, some of the countable resources that are considered for a single applicant include cash, stocks, bonds, mutual funds, IRAs, cash value life insurance policies, tax deferred annuities, farm equipment, land and commercial real estate, CDs and their home.

Medicaid's Asset Exclusions

There are some Medicaid asset exclusions. The home is excluded if there is a spouse as long as the spouse or dependent relatives will continue to live in the home after the applicant receives benefits. If the person is single, there is an unavailability period of 13 months. Vehicles are also excluded, regardless of age, make and model. Any life insurance policy that does not have a cash value is excluded. This would be term life insurance policies. Only policies with a cash value will be considered an asset.

Funeral and burial contracts that are irrevocable can be beneficial when there is a need to spend assets. These contracts are very effective at consuming assets. In addition, final expense insurance is also a way to spend down some of the resources. If the individual has a promissory note, the income that is earned from the note is not exempt, however, the note will be considered unavailable until due.

Medicaid's spend down of assets with regards to Community Spouse Resource Allowance

Community Spouse Resource Allowance is important when dealing with Medicaid's spend down of assets. The CRSA is a specific amount of assets, including IRA assets that the community spouse is allowed to hold in their name while the other spouse is confined to a nursing home and on Medicaid.

Medicaid's spend down of assets with regards to annuity

Medicaid annuities are also important to understand. There are different requirements that need to be met for assets in an annuity to be excluded. The annuity must be structured the right way. If it is not, the family may be denied Medicaid benefits and will also be tying up the assets. All annuities should be properly structured by a Medicaid advisor.