Medicaid Resource Test

Resources are cash or those assets, which can be readily converted to cash, such as bank accounts, life insurance policies, stocks, bonds, mutual fund shares and promissory notes. Resources also include property not readily converted to cash (i.e., real property).

Yes. Under Medicaid you are allowed to keep a small amount for your personal needs. You can also keep some of your income for your family if they are dependent on you. A spouse who remains in the community may also keep resources and income above the levels shown.

When applying for Medicaid for nursing facility services (Nursing Home), the local department of social services will look at financial transactions to determine whether any assets have been transferred or given away for less than fair market value during a certain time period prior to your application in order to determine if a transfer of assets penalty period needs to be applied. This is known as the "lookback" period. Currently the "lookback" period is 60 months (5 yrs) prior to the month you are applying for coverage of nursing home care.

A penalty period may be imposed for the transfer of non-exempt assets for less than fair market value. The penalty period results in a period of ineligibility for Medicaid coverage of nursing facility services.

A penalty period is not applied for the transfer of your home to the following individuals:

  • Spouse
  • Child under the age of 21
  • Sibling who has an equity interest in the home and has resided in the home for at least one year immediately prior to you entering the Nursing Home.
  • Adult child who resided in the home for at least two years, immediately prior to you entering the Nursing Home and who provided care to you which permitted you to reside at home rather than in a medical facility.

A life estate is limited interest in real property. A life estate holder does not have full title to the property, but has the use of the property for his or her lifetime, or for a specified period. The life estate is not considered a countable resource, and no lien may be placed on it.

If you or your spouse sell the life estate interest for less than fair market value, it can be considered a transfer of assets and may be subject to the penalty period.

You may establish an irrevocable pre-need funeral agreement with a funeral firm, funeral director, undertaker or any other person, firm or corporation which can create such an agreement for your funeral and burial expenses. Pre-need burial agreements purchased for certain members of your family on or after January 1, 2011 must also be irrevocable. The pre-need funeral agreement is used towards burial and funeral expenses and is not counted as a resource when determining Medicaid eligibility.

If you (your spouse) do not have an irrevocable pre-need funeral agreement or if the irrevocable pre-need agreement has less than $1500 designated for non-burial space items, you may be allowed to have money set aside in a burial fund. The limit for single individuals is $1500 or $3000 for a couple. Please note, these funds, must be kept separate from any non- burial fund related resources

A community spouse is someone whose husband/wife is currently institutionalized or living in a nursing home. The community spouse is not currently living in a nursing home and usually resides at the couple's home.

If your spouse is institutionalized or living in a nursing home, you will be permitted to keep some income known as a minimum monthly maintenance needs allowance (MMMNA). If you are currently receiving income in excess of the minimum monthly maintenance needs allowance, you may be asked to contribute twenty-five percent (25%) of the excess income to the cost of care for the institution.