Many assets (“resources”) are exempt from Medicaid when there is a spouse at home

Medicaid is a combined federal and state program that pays for nursing home costs. The combined assets of spouses are available for the care of the ill or "institutionalized" spouse, regardless of which spouse owns the assets.

However, many assets ("resources") are exempt from Medicaid when there is a spouse at home (the "community" spouse).

The exemptions follow:

     The home, up to a value of $500,000;

    Up to $110,000 in resources;

     One automobile;

      Prepaid funeral and burial for applicant and spouse;

     Household furniture, personal effects and jewelry with sentimental value;

     Annuities paying out a monthly income naming spouse as primary beneficiary;

     Medicaid Asset Protection Trust assets, if held in trust for more than five years;

     Supplemental needs trust (also known as "special needs trusts") for the benefit of a disabled person under age 65;

If the Medicaid applicant has a disabled child or grandchild, assets can be transferred immediately to a special needs trust for the benefit of the disabled beneficiary.

While the community spouse is living in the exempt home, repairs and improvements to the home are also exempt, including new carpeting, appliances, kitchens, baths and modifications for handicapped accessibility such as ramps and lifts for stairs. You can pay off a mortgage to reduce assets. Although only one car is allowed, you can trade in a clunker and buy a new car.

If there is no spouse, the resource is $2,500. The home and automobile are no longer exempt because those items are no longer needed. If an adult child cared for the parent and lived in the home for two years immediately before the parent entered the nursing home, the house may be deeded to that child under the "caregiver exemption." If a sibling of the applicant lived in the home for at least one year and has an "equity interest," the home may be deeded to that sibling. The term "equity interest" is broadly construed.