Medicaid is health insurance that helps people who can't afford to pay for their medical expenses.
Many people feel that because they own a home or have some assets that they can't qualify for Medicaid help with their nursing home and doctor's bills. The truth is there are a variety of assets people can own and still qualify. It's just a matter of knowing the rules, and making a plan to meet those requirements.
Asset limits for those applying for Medicaid include:
- Cash. You can possess $2,000 cash that will not be counted as an asset in determining your Medicaid eligibility.
- Home. There is a $500,000 exclusion toward your home, meaning that if your home is valued at $500,000 or less at the time of your application, your home is excluded as an asset. Some states use the higher permitted exemption of $750,000.
- Car. Up until recently, you could exclude only one car at a value of $4,500 or less, however that law has been changed. Now, one automobile of ANY current market value is excluded on your application.
- Funeral and Burial Funds. If you have a pre-planned funeral or memorial arrangement, the entire value of that plan is excluded. If you do not, a separate bank account that contains $1,500 toward funeral expenses can be excluded. If you have pre-purchased burial plots, you can exclude not only the costs of the plot for the applicant, but for the entire family, and still be eligible for Medicaid.
- Property. According to federal law, any real or personal property that is essential to self-support, regardless of value or rate of return, is excluded. That could include farms, rental properties and other real estate investments that generate income necessary for self-support. For rental income, however, the property must generate at least 6 percent of its value annually in order to qualify for the exclusion.
- Life Insurance. Only the cash value of a life insurance policy owned by the applicant is counted, thus, all term policies are ignored.
There are so many other rules that can benefit those who aren't sure they'll have enough when the time comes. The key is to plan now and act now. These laws exist for your protection, and avoiding the discussion and the planning necessary to take care of the potential complications just because it is an unpleasant topic will only result in a more unpleasant conversation when you realize you're not ready when the worst happens. That can be a very expensive dilemma. Peace of mind right now, however, won't cost a dime, and could save you hundreds of thousands of dimes later.