Qualifying for nursing home Medicaid can be a complicated process for individuals who have too many assets. Nursing home Medicaid covers the cost of nursing care for those who have a medical need for such care. Along with showing a medical need for nursing home care, a Medicaid applicant must meet certain income and asset levels to qualify. The asset levels for nursing home Medicaid are extremely low, such as allowing under $2,000 in unexempt assets for non married individuals applying for Medicaid. There are several different ways to legally reduce assets to qualify for nursing home Medicaid. One primary method is to purchase assets that do not count against Medicaid eligibility, called exempt assets.
There are several categories of exempt assets. Some examples are the primary residence up to a certain level of value, vehicle, household goods, and burial items. While purchasing exempt assets is useful to reduce the amount of assets that are countable, care should be taken not to waste money in an attempt to reduce assets. For example, it is reasonable to reduce assets by purchasing a wheelchair accessible minivan to transfer the nursing home applicant to doctor’s appointments and social function. It would not be reasonable to purchase a high end sports car that the Medicaid applicant is unable to fit in just to reduce the amount of assets. While under Georgia Medicaid regulations the Medicaid applicant can have a vehicle of any value exempted from Medicaid, the maintenance and insurance of a $200,000 sports car make it an impractical choice for a spend down.
When reducing assets for Medicaid spend down by purchasing exempt asserts, two caveats should be considered. First, if the Medicaid applicant purchases assets that are exempt and later sells those assets, the proceeds from the sale that are not reinvested into another exempt asset will be considered a countable resource. For example, if Jerry is on Medicaid and sells his BMW sedan for $28,000 on July 15th, if those proceeds are not used to purchase another exempt asset by July 31st, Jerry will be over the Medicaid asset limit and will not qualify for nursing home Medicaid for August. Secondly, assets that are exempt for Medicaid eligibility can still be taken by Medicaid through estate recovery when the Medicaid applicant dies. Medicaid has a claim against the assets of the Medicaid recipient for up to the amount of money Medicaid paid towards nursing home care. For example, if a Medicaid applicant purchases a $80,000 vehicles, applies and receives coverage from Medicaid that pays for $125,000 in nursing home expenses over their life, and has the vehicle at death, Medicaid can make a claim against the vehicle and all other assets of the deceased Medicaid recipient up to the $125,000 expended for care.
Spending down assets by purchasing exempt assets can be an effective strategy to qualify for nursing home Medicaid, however, it is not the only strategy. Some applicants for nursing home Medicaid should also consider strategies that provide for cash savings that can be used to cover expenses that Medicaid does not cover. Those with assets above the asset limit for Medicaid should seek the services of an experienced elder law attorney to create an individualized plan for reducing assets for Medicaid qualification.