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How is financial eligibility determined for Medicaid?

Many New York residents might benefit from learning more about how financial eligibility for Medicaid is determined. Medicaid applicants are required to submit documentation of any assets in their possession. When states assess the applicant's financial eligibility, some of the assets will be included in calculating income, while others may be excluded. The assets typically counted towards eligibility include certificates of deposit, stocks and bonds, savings accounts and checking accounts.

Real property, excluding the applicant's primary residence, and anything more than one motor vehicle may also be considered when calculating Medicaid eligibility. Some of the assets that are typically excluded in the calculations include the applicant's primary residence and vehicle, personal property, household items, life insurance valued at less than $1,500, pre-need burial agreements and other similar burial arrangements, a maximum of $1,500 set aside for burial purposes and assets that are held in certain types of trusts.

Regardless of its equity value, the home does not make someone ineligible for Medicaid, as long as it is the applicant's primary residence. However, the value of the home may affect if Medicaid will cover long-term care or waiver services that are community-based. When determining the limits for coverage, Medicaid is more concerned with the applicant's equity interest, not its fair market value. In 2013, the equity value that qualified for a denial in coverage ranged from $536,000 to $802,000, depending on the state.

People who need more information about how Medicaid planning can depend on the value of certain assets may benefit from consulting a lawyer who has experience in elder law. Such a lawyer can be effective in assisting clients with gathering all of the necessary documentation needed to complete the application process.

Source: LongTermCare.gov, "Financial Requirements — Assets", December 23, 2014

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