Paying for long term care can present a challenge. Many prospective clients come in to the office wondering how the State takes their money. The State Medicaid office generally doesn’t take money. Medicaid just doesn’t pay for care until the applicant for Medicaid is impoverished to $1,500.00 in countable assets. When a person applies for Medicaid, the caseworker divides assets into countable and exempt assets.
What are exempt assets?
In Ohio, there are certain assets that are considered exempt from the $1,500.00 asset determination. The biggest asset that is exempt is the house. Even a single person can exempt the first $552,000 for 13 months and still be eligible for Medicaid. If a Medicaid applicant is married, the house can be exempt for an indefinite amount of time and value.
Another common asset that is exempt is an irrevocable prepaid funeral contract or $15,000.00 in funds set aside in a funeral trust. The reason for this is that Medicaid wants people to be able to pay for their funerals. The funds set aside for a funeral can be doubled if there is a spouse.
A car can be considered exempt for a single person up to $4,500.00 or more if used for medical transportation. Two cars can be exempt for married couples.
Annuities can be considered exempt if they are irrevocable, non-assignable and actuarially sound according to the Medicaid calculations. A Medicaid compliant annuity is a contract with an insurance company where a person gives money to purchase a stream of income. The money is not available to the person after it is purchased, making it exempt if it is Medicaid compliant.
Many of our Holocaust survivors have years of accumulated Holocaust reparations. Those assets are exempt. There are other types of accumulated assets like that which are exempt.
Another common exempt asset are the household belongings and one wedding ring and one engagement ring.
There are additional exempt assets of up to $119,220.00 in funds for the healthy community spouse.
What are countable assets?
Countable assets for Medicaid is anything that is not exempt. Cash, Certificates of Deposit, annuities that can be cashed in, life insurance with cash value and even Individual Retirement accounts (IRA’s) are all considered countable, especially for a single person, regardless of tax implications or penalties. Having a good handle on what type of assets you or a parent have is critical to having Medicaid approved the first time and protecting the maximum amount of assets.