In order to be eligible for Medicaid benefits, a nursing home resident may have no more than $2,000 in “countable” assets. Note that Medicaid is a state-run program, so the rules are somewhat different in each state, although there are federal guidelines that all states must comply with.
The spouse of a nursing home resident–called the “community spouse”–is limited to $66,480 (in South Carolina in 2021) in “countable” assets. This figure changes each year to reflect inflation. Called the “community spouse resource allowance,” this is the most a community spouse can retain without a hearing or a court order.
Example: If a couple has $100,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple’s assets have been reduced to a combined figure of $52,000 — $2,000 for the applicant and $50,000 for the community spouse.
All assets are counted against these limits unless the assets fall within the short list of “noncountable” assets. These 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. The value of an additional automobile may be excluded if needed for health or self-support reasons.
- The applicant’s principal residence, provided it is in the same state in which the individual is applying for coverage. In some states, the home will not be considered a countable asset for Medicaid eligibility purposes as long as the nursing home resident intends to return home. Under the Deficit Reduction Act of 2005 (DRA), principal residences may be deemed noncountable only to the extent their equity is less than $603,000 (in 2021). In all states and under the DRA, the house may be kept with no equity limit if the Medicaid applicant’s spouse or another dependent relative lives there
- Prepaid funeral plans and a small amount of life insurance
- Assets that are considered “inaccessible” for one reason or another