The Basics of Medicaid – What You Can and Can’t Keep
To qualify for Medicaid in North Carolina for nursing home care, 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 (or countable) assets.
Exempt assets are those which Medicaid will not take into account (at least for the time being). In general, the following are the primary exempt assets:
- Home, up to $500,000 in value. The home must be the principal place of residence. The nursing home resident may be required to state an intent to return home” even if this never actually takes place.
- Personal belongings and household goods.
- One car or truck, that qualifies as an esssential vehible.
- Income-producing real estate, but only with limited equity.
- Burial spaces and certain related items for applicant and spouse.
- Up to $1,500 designated as a burial fund for applicant and spouse.
- Irrevocable prepaid funeral contract.
- Value of life insurance if face value is $10,000 or less. If it does exceed $10,000 in total face amount, then the cash value in these policies is countable. (Note, too that the rules for Special Assistance, which cover Medicaid for assisted living, only allows $1,500 of face value of life insurance.)
All other assets are generally non-exempt, and are countable. Basically, all money and property, and any item that can be valued and turned into cash, is a countable asset unless it is one of those assets listed above as exempt. This includes:
- Cash, savings, and checking accounts, credit union share and draft accounts.
- Certificates of deposit.
- U.S. Savings Bonds.
- Individual Retirement Accounts (IRA), Keogh plans (401K, 403B). (In some states, IRAs and retirement plans can be exempt but not in NC.)
- Nursing home accounts.
- Prepaid funeral contracts which can be canceled.
- Trusts (depending on the terms of the trust)
- Real estate (other than the residence).
- More than one car.
- Boats or recreational vehicles.
- Stocks, bonds, or mutual funds.
- Land contracts or mortgages held on real estate sold.
While the Medicaid rules themselves are complicated and tricky, it’s safe to say that a single person will qualify for Medicaid as long as she has only exempt assets plus a small amount of cash and/or money in the bank, up to $2.000 in North Carolina.
Note that these rules apply to nursing home care Medicaid in North Carolina. Medicaid for assisted living has different rules.Some of the rules are similar, but many are different.