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In order to understand Medicaid qualification, you first need to know how Medicaid treats your assets.

Basically, Medicaid breaks your assets down into two separate categories. The first are those assets which are exempt and the second are those assets which are non-exempt or countable.

Exempt assets are those which Medicaid will not take into account (at least for the time being). While the laws in various states differ in some respects, generally the following assets are exempt in North Carolina :

• The home, no matter its value. The home must be the principal place of residence. The nursing home resident 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, there may be some useage requirements.
• Prepaid funeral plans and burial plots.
• Cash value of life insurance policies, as long as the face value of all policies added together does not exceed $10,000. If it does exceed $10,000 in total face amount, then the cash value in these policies is countable. Also, term life insurance is exempt.
• Cash (e.g. a small checking or savings account) not to exceed $2,000.
• These are basically the assets which Medicaid will ignore, at least for now. Keep in mind, however, that the estate recovery unit may come back to recoup payments made to a Medicaid recipient after the death of the recipient and the recipient's spouse if they are married.

All other assets which are not exempt (i.e. the ones not listed earlier) are countable. This includes checking accounts, savings accounts, certificates of deposit, money market accounts, stocks, mutual funds, bonds, IRAs, pensions, second cars and so on. While there are some minor exceptions to these rules (e.g. in North Carolina a retirement plan may be exempt if it cannot be withdrawn in a lump sum), for the most part, all money and property, as well as any item that can be valued and turned into cash is a countable asset, unless it is one of those listed earlier as exempt.

While the Medicaid rules themselves are complicated and somewhat tricky, for a single person it's safe to say that you will qualify for Medicaid so long as you have only exempt assets plus a small amount of cash, (i.e. $2,000 in North Carolina ).

For a married couple the community spouse (i.e. the one not needing nursing home care) can generally keep one-half of the assets up to a maximum of roughly $100,000. Of course, this does not mean there are not things which can be done to protect assets beyond these levels. Instead, this issue of Elder Law Today is designed to review the basics in a way which a caseworker from Division of Social Services in North Carolina would do so.

In other issues we cover ways that single persons can often protect 50% or even more of their assets and married couples can often protect nearly all of their assets.

Future issues will be dealing with related topics covering additional Medicaid planning strategies as well as nursing home selection and care issues.

In Service Training Available:

The Elderlaw Firm offers in-service training on topics related to:

• Division of Assets
• Medicaid Planning
• Guardianship
• Powers of Attorney
• Other Elder Law Issues

Elder Law Today is written by Dennis J. Toman, Certified Elder Law Attorney. This newsletter is published as a service of The Elderlaw Firm, U.S. Trust Center, 301 N. Elm St., Greensboro, NC 27401 . This information is for general informational purposes only and does not constitute legal advice. For specific questions, pleae contact us to consult a qualified attorney.

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