THE BASIS OF MEDICAID “… or what you can and cannot keep”
In order to understand Medicaid qualification, you first need to know how Medicaid treats your assets.
Basically, Medicaid breaks your assets down into two separate categories. The first are those assets which are exempt and the second are those assets which are non-exempt or countable.
Exempt assets are those assets which Medicaid will not take into account (at least for the time being). While the laws in states differ in some respects, generally in South Carolina the following assets are exempt:
The home, no matter its value. The home must be the principal place of residence. The nursing home resident may be required to show some “intent to return home,” even if this never actually takes place.
Household and personal belongings, such as furniture, appliances, jewelry, and clothing.
One vehicle, there may be some limitation on value.
Prepaid funeral plans and burial plots.
Cash value of life insurance policies, as long as the face value of all policies added together does not exceed $1,500. If it does exceed $1,500 in total face amount, then the cash value in these policies is countable. Also, term life insurance is exempt.
Cash (e.g. a small checking or savings account) not to exceed $2,000.
These are basically the assets which Medicaid will ignore, at least for now. Keep in mind, however, that the estate recovery unity may come back to recoup payments made to a Medicaid recipient after the death of the recipient’s spouse if they are married. They do this by filing a claim against the Medicaid spouse’s estate in probate.
All other assets which are not exempt (i.e. the ones not listed earlier) are countable. This includes checking and savings accounts, certificates of deposit, money market accounts, stocks, mutual funds, bonds, IRAs, pensions, second cars, and so on.
While there are some minor exceptions to these rules (e.g.) in South Carolina the IRA or other retirement plan of the community spouse, non Medicaid spouse, is exempt), for the most part all money and property, as well as any item that can be valued and turned into cash is a countable asset, unless it is one of those listed earlier as exempt.
While the Medicaid rules themselves are complicated and somewhat tricky, for a single person it’s safe to say that you will qualify for Medicaid so long as you have only exempt assets plus a small amount of cash, (i.e. $2,000).
For a married couple, the community spouse (i.e. the one not needing nursing home care) can generally keep one-half of the assets up to a maximum of just under $66,480. Of course, this does not mean that there are not things which can be done to protect assets beyond these levels. Instead, this issue of Elder Law Today is designed to review the basics in a way in which a caseworker from DSS would do so.
Depending on each family’s particular fact situation, often these are several options that may be used by family members to protect family assets from Medicaid spend down, etc., and qualify the spouse or parent for Medicaid.
Elder Law Today is written by Jackson E. Fields, Jr., Attorney at Law. This newsletter is published as a service of the Fields Law Firm, P.A. This information is for general informational purposes only and does not constitute legal advice. For specific questions, you should consult a qualified elder law attorney. © www.thefieldslawfirm.com
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