A single person must spend down to allowed amounts for Medicaid, and in North Carolina currently can only have $2,000 or less in the bank. Greensboro Elder Law Attorney Dennis Toman explains that just spending down isn’t enough to protect valuable assets, such as the home place.
For a single person who needs nursing home care, and needs to find out how to pay for it through Medicaid, Medicaid will allow you to keep $2,000 of countable assets.
Now, countable assets are everything except for not countable assets. For Medicaid purposes, the non countable assets are your house, your car, prepaid funeral expense, about $10,000 of life insurance and household goods and furnishings.
Medicaid is going to require that you only have $2,000 in the bank. IRAs are countable, stocks and balance are countable, other pieces of real estate besides the home place are countable as well.
Now, one caution that I often give to families who are talking about the Medicaid spend down, is just because something is non-countable, doesn’t mean that it’s protected. For example, if a person receives Medicaid in a nursing home, and they have a house and $2,000, they’ll be eligible for Medicaid, because their house is not countable.
But many times, what the family doesn’t understand is that as soon as the person is eligible for Medicaid, Medicaid keeps track of every dollar that’s spent on their care. And when that resident dies, Medicaid is going to present a bill to the family, and the house is subject to being sold.
That’s what’s called estate recovery; the family could lose the house, even though it was not countable because they didn’t take the right steps to protect it. Too many families don’t get that information until it’s too late.