When people are looking to pay for nursing home care by qualifying for Medicaid, a big question they have is what assets they can keep. The answer to this question is determined by how Medicaid classifies the asset. Under Medicaid there are two kinds of assets: “Countable” and “non-Countable.“
People applying for Medicaid can keep all non-Countable assets but can only keep $2,000 of Countable assets. Generally, everything you have is considered a Countable asset except for the following items:
- An irrevocable pre-paid funeral plan
- Life Insurance with a face amount of less than $1,500
- One vehicle,
- Personal items (clothes, household furnishings, wedding rings, etc.)
Converting Assets from Countable to non-Countable
There are also ways to convert a Countable asset into a non-Countable asset. If you have a spouse who is living at home, the home becomes non-Countable if the spouse is living at home. Your spouse can also keep one-half of the Countable assets, up to a maximum amount (in 2021 that amount is $130,380).
You can also convert a retirement account into a non-Countable asset by making sure the account is in payout status. This means that the account only provides a source of income and no longer has an account value that can be cashed out.
A person can qualify for Medicaid much more quickly by converting assets from Countable to non-Countable. This can also provide much needed income to a spouse who is at home.
To learn more about your options for paying for long term care costs, read our article Paying for Long Term Care.
If you need help with planning for a long term care stay for yourself or a loved one, click this link and request a no-cost initial appointment with attorney Tim Alley.