If a person has no countable assets, they can generally qualify for Medicaid in North Carolina quickly. For a single person, North Carolina Medicaid requires that a nursing home resident be in a Medicaid bed, need nursing home level of care, and have no more than $2,000 of “countable” assets.
For a married couple with one spouse in a nursing home, the rules are different, as explained below. Generally with the right help, the ill spouse can qualify for Medicaid within 2 or 3 months depending on the overall assets. However, often couples are told to spend half of their assets first before applying. The Medicaid rules don’t require that; they simply require that excess countable assets be converted to noncountable assets.
The maximum countable assets that the community spouse may keep is one-half of the couple’s countable assets, up to a maximum of $117,250 (in 2014). That figure increases each year to reflect inflation. It is called the “Community Spouse Resource Allowance.” The community spouse may in any case keep a minimum of $23,448 (in 2014) of countable assets. Reducing countable assets down to the permitted level for Medicaid eligibility is called the “spend down.”
Example: If a couple has $120,000 in countable assets on the “snapshot date” for the Medicaid application, the applicant will be eligible for Medicaid once the couple’s assets have been reduced to a combined figure of $62,000. That’s $2,000 for the applicant and $60,000 for the community spouse. There would be a required spend down of $48,000. If on the other hand, the couple only had $20,000 in countable assets, the couple could keep all of the $20,000 without any spend down needed.
Some states are more generous toward the community spouse than North Carolina, allowing the community spouse to keep all countable assets up to the . In these states, the community spouse may the full amount of the Community Spouse resource allowance, even if it’s more than half of the couple’s assets. However, that’s not the case in North Carolina.
All of the couple’s assets are “countable” unless they fall in the narrow category of “noncountable” assets. It doesn’t matter whether the assets are held by one spouse or the other spouse, by both spouses, or if the children’s names are on the accounts. For this purpose, noncountable assets include the following:
- Personal possessions, such as clothing, furniture, and jewelry.
- One motor vehicle, regardless of value, as long as it is used for transportation of the applicant or a household member. Any other vehicles will be countable. If there is more than one vehicle, the most valuable one will be noncountable.
- The applicant’s principal residence, even if its in another state, if the nursing home resident intends to return home or if the community spouse or a disabled child resides there. The principal residence’s equity must be less than $543,000.
- Prepaid funeral plans and a small amount of life insurance (generally $10,000 or less of permanent insurance; term insurance is not countable).
- Assets that are considered “inaccessible” for one reason or another, if proven to Medicaid.
There is a five-year look back for Medicaid eligibility in a nursing home. That confuses many people who think that there is a five year waiting period for Medicaid, or that if a person has too much in Medicaid they have to pay privately for up to five years even if it means they must spend all of their assets. The Medicaid rules don’t require that.
There are steps you can take to protect your assets and qualify for Medicaid. See other articles for more information about Medicaid planning.