What assets are exempt when applying for Medicaid?

There are many Medicaid programs, each with their own rules for qualification. This post describes the rules for Facility Medicaid eligibility in Iowa for the year 2020. Each year, DHS may adjust any dollar amounts listed below, so all figures are only accurate for the 2020 calendar year.

When applying for Medicaid, there is an asset limit that determines an applicant’s eligibility. Read more about the asset limit here. Assets that count toward this limit include the applicant’s property, such as houses and vehicles. 

However, one vehicle owned by the applicant is considered exempt, and depending upon the circumstances, the applicant’s primary residence may be considered exempt. By being exempt, these assets are not counted toward the applicant’s asset limit, which affects the applicant’s eligibility status as well as how the applicant spends down to qualify for Medicaid. Personal needs items are also exempt, and make an excellent spend down item.

As detailed earlier, an applicant is always allowed one exempt vehicle. If the applicant has more than one vehicle, then the most expensive is considered exempt. Keeping this rule in mind, oftentimes, it is suggested to purchase a vehicle that better serves the needs of the applicant or a spouse at home. A handicap or wheelchair accessible van (or in general, a vehicle that is easier to get in and out of), can significantly improve the quality of life of the applicant or a caregiver driving them to and from the care facility. Depending upon your financial situation, this may be an option for you to consider in your Medicaid planning.

Unlike with an applicant’s vehicle, the applicant’s home is not always considered exempt, and it depends upon certain circumstances. If a disabled dependent child or spouse is living in the home, or if the applicant intends to return home, then it would be considered exempt. An intent to return home is a document that states the applicant’s desire to return to living in their home and is signed by the applicant or POA. This document is sent into DHS with the Medicaid application. There are many circumstances in which submitting an intent to return home becomes essential to successfully acquiring Medicaid assistance, but it is not alway a clear cut solution. That’s why it is important to speak with an expert to discuss what options are best for you to pursue. Especially when planning for a possible sale of the applicant’s home, which can complicate Medicaid eligibility, it’s best to seek professional advice.

Call us at (515)344-4284 to review your Medicaid eligibility, or contact us here to arrange your free consultation.

These posts are purely informational and not to be construed as legal or Medicaid planning advice. We may describe general best practices or give examples; however, without considering your unique situation, this is not necessarily your best option. Please contact us for your free consultation to receive custom-tailored advice.