24 May
Older adults hoping to qualify for Medicaid benefits in their golden years often fail to plan ahead. They may then end up scrambling at the last minute to make financial moves that allow them to qualify for Medicaid.
Given that Medicare does not cover in-home nursing support or long-term care costs related to nursing homes, Medicaid eligibility can be crucial for older adults struggling to live independently. All too often, older adults wait to plan for Medicaid coverage until they actually need benefits. They may put themselves at a disadvantage by failing to make necessary financial moves well before applying.
When people apply for Medicaid, the state looks carefully at their income as well as their countable assets. What property limits apply to those seeking Medicaid coverage?
The asset limits for Medicaid are strict
People have to possess limited property and have relatively low incomes to qualify for Medicaid. Simply owning a vehicle can be enough to make an individual ineligible for Medicaid. The same resource limits have been enforced in Texas since 1989.
Currently, individuals cannot have more than $2,000 in countable assets when applying for Medicaid. Couples can have up to $3,000 in countable assets. Countable assets include vehicle equity, balances in bank accounts and real estate holdings.
However, there is an exception for any equity accrued in the primary residence of the applicant. In other words, people can qualify for Medicaid despite owning their own homes, but many other assets could make them ineligible. Even home furnishings can be enough to make qualifying for Medicaid a struggle.
Older adults hoping to meet the strict limits that apply may need to take steps well in advance to diminish the resources held in their names. Moving valuable resources to a trust is one way to diminish personal holdings and improve eligibility for Medicaid. There may be other strategies that work as well. People generally need to make any significant financial moves at least five years before they expect to apply for Medicaid. Otherwise, they could be at risk of a penalty even if they qualify.
Learning more about the strict rules that govern Medicaid can help people cover their long-term care costs. Advanced planning is important for those who may need Medicaid benefits with little warning, as well as those hoping to leave resources for their loved ones after they die.