Medicaid Largesse

When people think about using Medicaid to pay for nursing home care, they generally think that the program will pay only after most of their assets are gone. However, there are little known rules that allow people to keep certain substantial assets and still get Medicaid for nursing home care. Some of these rules apply only if there is a spouse living at home, and others apply even if a single person is seeking Medicaid benefits.

In the past, there was a limit on the equity value of one’s automobile. If the car was worth more than a certain amount, then the owner or the owner’s spouse might not be eligible for Medicaid (depending on what other assets were in hand). Now, in Maryland one may own a car of any value. In fact, one may own ten cars, and none of them will be counted for Medicaid eligibility purposes.

The law used to impose strict requirements on income producing property. If one owned an income producing property with an equity value of $6,000 or less, and that asset produced a minimum 6% return on the investment, then the asset was not counted in the Medicaid eligibility process. Now Maryland allows one to keep income producing property of any value as long as that property produces income that is reasonable.

Conceivably, then, one may own 30 rental townhouses worth $2,000,000 and as long as those properties return fair market value rent, these assets may be disregarded when determining whether the owner’s spouse would be eligible to receive Medicaid for nursing home care. [If a single person owned this much income producing property, then her income would be so high that Medicaid would not be needed.]

Also, jointly owned property will be valued at zero for purposes of the Medicaid eligibility determination if the joint owner would refuse to participate in a sale of the property.

These and other special rules make it possible to preserve more assets than one might think if nursing home care should become necessary.