To qualify for Medicaid, applicants must pass some fairly strict tests on the amount of assets they can keep. To understand how Medicaid works, we first need to review what are known as “exempt” and “non-exempt assets.
Generally exempt assets for purposes of North Carolina Medicaid in a nursing home, consists of:
- The residence, if the community spouse is living there, or if the applicant/recipient has an “intent to return home.” Note that this can be stated as an intent to return, even if the person can no longer make decisions (for example has dementia.)
- One essential vehicle, provided that the applicant/recipient can ride in it.
- Pre-need burial contracts that are irrevocable.
- Life insurance policies that have no more than $10,000 of initial face value. If the policy has increased in death benefit that is not countable if the original face value was $10,000 or less. However, “participating policies” that have dividend accounts are countable to the extent of the dividend account. Term policies and group policies (which have no cash value) are not countable assets. As you can see, this is a tricky area.
- Personal furnishings (household goods)
- Business property provided that the Medicaid applicant or spouse actively participates in the business.
- Jointly owned real estate, if co-owned with someone other than the spouse.
Pretty much everything else is countable for Medicaid. In some states, IRAs are noncountable. However, in North Carolina IRAs are considered countable assets.
It is also important to consider that just because an asset is noncountable or exempt, it is not protected. In other words, a person can qualify for Medicaid owning their home, because that is a noncountable asset. However, if the Medicaid recipient dies in the nursing home, then the State of North Carolina can seek estate recovery and force the sale of that homeplace. So in other words, while the home was exempt, it was not protected unless further steps are taken.