Medicaid Eligibility Asset Limits in NJ – Wolfe Ossa Law (2024)

Medicaid eligibility is based on a variety of factors but it’s goal is to assist people with limited income and few assets cover health care costs. Medicaid is a joint federal and state program that is administered by county in New Jersey. But what exactly does low income and limited resources mean? Can you get Medicaid if you own a home? Can you own a car on Medicaid? What about a life insurance policy?

Many people believe they are do not have Medicaid eligibility for coverage of nursing home costs and doctor’s bills simply because they own property or have some money in the bank. The truth is there are a variety of assets seniors can own and still be eligible. It is just a matter of learning the rules and making a legal and financial plan to ensure they are met.

Keep in mind that each state administers its own unique mix of Medicaid programs and sets its own financial and medical eligibility requirements (within federal parameters) for each. States consider both income and assets in the financial qualification process.

In 2021, a single Medicaid applicant must have income less than $2,382 per month and may keep up to $2,000 in countable assets to qualify financially. Generally, the government considers certain assets to be exempt or “non-countable” (usually up to a specific allowable amount). Any cash, savings, investments or property that exceeds these limits is considered a “countable” asset and will count towards an applicant’s $2,000 resource limit.

Medicaid Eligibility Asset Limits in 2021

Countable Assets

A single applicant who is 65 or older can possess up to $2,000 in cash, stocks, bonds, certificates of deposit (CDs) and other liquid assets. Asset limits for married couples vary by state, Medicaid program and whether one or both spouses are applying for Medicaid.

Primary Residence Value

An applicant’s primary residence is exempt if it meets a few fundamental requirements. First, the home must be in the same state in which the owner is applying for Medicaid. Second, the applicant’s equity value in their home (fair market value minus debts if owned singly) must be valued at $603,000 or less, although some states use higher limits of up to $906,000. Third, the applicant must either continue residing in the primary residence or have an “intent to return home” if they are hospitalized, staying at a senior rehabilitation facility or move to a nursing home. If a Medicaid applicant’s spouse or dependent child continues living in the home following their move to a nursing home, then the house is considered exempt regardless of its value.

Car

One automobile of any current market value is considered a “non-countable” asset for Medicaid purposes as long as it is used for the transportation of the applicant or another member of their household.

Funeral and Burial Funds

Generally, Medicaid considers the value of any non-refundable pre-paid funeral plan or burial contract exempt. This includesirrevocable funeral trusts (IFTs) in most states. IFT limits vary, but the cap is typically $15,000 or less per spouse.

Property for Self-Support

According to federal law, only an applicant’s equity interest in any real or personal property that is essential to their self-support is taken into account. Examples include farms, rental properties and other real estate investments that generate income. Up to $6,000 of an applicant’s equity interest in the property is exempt from their allowable assets, but only if the property generates a net annual income of at least six percent of the equity value annually. Any value above the $6,000 cap is counted as an asset.

Life Insurance Policies

Medicaid looks at both the face value and cash value of life insurance policies. Only the cash value of a life insurance policy owned by an applicant may be counted. Generally, Medicaid exempts whole life insurance policies that total up to $1,500 in face value for an individual applicant. If a policy or policies exceed the face value limit, then the cash value of the policy/policies willcount towards their asset limit. Of course, some states permit higher exemption amounts, others allow partial exemptions, while still others enforce limits on a combined total of both life insurance and burial funds.