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In addition to the income test, an applicant must also estliablish asset eligibility to quality for Medicaid. Essentially, an applicant for long-term care Medicaid cannot have more than $2,000 in countable assets. When people have more assets than they are allowed to keep, they often do something called "spending down."
Initially, some assets are exempt, meaning they are not counted toward elgibility. For most people these exempt assets are:
- The applicant's home up to $500,000 in equity. This includes all land contiguous to the home. Prior to February 8, 2006, when the $500,000 cap was imposed, the homeplace exemption was unlimited.
- One automobile is excluded for each family if used for the transportation of the eligible individual/couple or a member of the eligible individual’s/couple’s household. See section 2308.
- Tangible personal property valued under $2,000.
- Certain income producing property.
- Life insurance or a funeral set-aside valued up to $10,000.
- Other assets that meet specific conditions.
Unless an asset is specifically exempt, it is countable. Most assets that can be easily liquidated are countable. These include:
- Cash and cash equivalents such as checking accounts and savings accounts
- Stocks, bonds, mutual funds
- The cash surrender value of non-exempt life insurance policies
- Non-exempt real estate, including any home equity in excess of $500,000
- Most annuities
Property that is held jointly with another person may or may not be partially exempt.
For married couples, the healthy spouse is allowed to keep all of the exempt assets PLUS a resource allowance from the countable assets. This resource allowance is adjusted for inflation each year.
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