How can a Medicaid recipient purchase a replacement car without endangering his benefits?

I had a neighbor who paid cash for a used car. She was on PADD, a state prescription plan. They felt if she could spend 5k on a car she could afford her prescription. I suggest you talk to Medicaid before any money is spent.

My autistic friend gets Medicaid and disability here in Ohio. In Ohio, you can get a new car but there are restrictions. The car must be 5 years old or older but can't be one of those restored classic cars. Medicaid views cares newer than 5 years old that you don't need Medicaid. He almost lost both Medicaid and disability because he tried to buy a 2018 car. He and his dad said that his trust fund was paying for the car but his case worker said that it didn't matter if the trust fund was paying for it, they still had to follow the rules. The caseworker said that if they went through with getting the car, Medicaid and disability benefits would cease, they would have to pay all that disability money back and there were going to be legal problems.

Hi MichiganFred, my cousin has that limited-asset thing with her "straight medicaid".
I saw on the medicaid website in her state of N.Y. that recipients are allied to own a car if its for work purposes.
Also saw that a 'trust' can be established (by the recipient of medicaid) in the case of winning lottery or something like that. The rule demands though, that the medicaid recipient must be cognitive enough to follow through with the lawyer on his own. So mentally handicapped folks could not acquire this type of trust. Anyway, hope this helps you out. Try going directly to your state's medicaid website: Q&A section.
Thats where I read all this. Good luck.

Thanks to everyone who responded. My friend - let's call him Dan - does not receive long-term care services, but is on traditional (as opposed to expanded) Medicaid. He does have to report all income and assets on a yearly basis. And the windfall, if it comes through, may put him just above the amount of annual income Medicaid recipients are permitted to receive (approx. $12,500), yet it may not even be enough to purchase a reasonable used car.
Dan is very reluctant to contact his caseworker because according to him they rarely respond and have caused his benefits to be cut more than once in the past.
I question whether spending the money immediately will solve the problem, because at the annual renewal, he will still need to report both the income and the car purchase, and there's no reason to believe the state would not take measures at that point.
Does anyone have a reference to any state law or policy that would cover this question?

There is value limit for the car set by his state Medicaid program. Some states are more generous than others. If the amount he receives is in excess of the asset limit, he may lose Medicaid benefits.

Hoping that Tacy or Igoo will chime in here, but it seems to me that if he uses the money before the end of the month in which it is deposited in his account to buy an allowable car, he won't endanger his benefits.

Best thing to do is to call his support worker.

He’s allowed to have money. And a car. Hes not on LTC Medicaid and appears you are in Michigan? He can use the money to buy a car.