Medicare pays your health costs after age 65. It does not cover nursing home care or assisted living. It does not test either income or wealth.
On the other hand, Medicaid (I know the name is very similar and it is very confusing) is a health insurance program for low income people. To be eligible, you have to pass both income and wealth tests. If you qualify, it will pay for your nursing home costs.
What Assets Can You Keep?
So, what assets can you keep and still qualify for Medicaid? These are called “exempt assets”.
It goes without saying that this government program is a bit byzantine and has very strict rules. In addition, they vary a bit by state. These rules are the general ones for Connecticut. New York varies a bit.
Medicaid breaks your assets down into two separate categories. The first are those assets which are exempt (you can keep them and qualify) and the second are those assets which are non-exempt (you have to eliminate them to qualify).
The following assets are exempt and you can keep them:
•Your home, regardless of value. However, the home must be the principal place of residence. You may be required to show some “intent to return home,” even if this never actually takes place.
•Household and personal belongings, such as furniture, appliances, jewelry and clothing.
•One vehicle, but there may be some limitation on value.
•Prepaid funeral plans and burial plots.
•Cash value of life insurance policies, as long as the face value of all policies does not exceed $1,500.
•Term life insurance.
•Cash (checking or savings account) not to exceed $1,600.
While there are some minor exceptions to these rules, for the most part, all money and property, as well as any item that can be valued and turned into cash is a countable asset.
For a single person you will qualify for Medicaid so long as you have only exempt assets plus a small amount of cash, (i.e. $1,600 in Connecticut) For a married couple the the spouse not needing nursing home care can generally keep one-half of the assets up to a maximum of $109,560.
There are various techniques which can be used to maximize the assets you can keep, transfer or hold with your spouse. An Elder Lawyer can help you understand these rules and preserve assets for your spouse or children.