Asset Eligibility
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Chapter 3: Asset Eligibility
Douglas G. Chalgian, Chalgian & Tripp Law Offices

Countable Assets
Excluded Assets
Valuing Countable Assets
Assets in Trust
Protected Spousal Amount

I.   In General

§3.1   A large part of Medicaid planning involves structuring the applicant’s assets and income in a manner designed to achieve eligibility while preserving those assets for the benefit of the spouse, heirs, and beneficiaries. In determining eligibility, income and assets are viewed separately and must be distinguished in assessing a client’s situation. The attorney must understand how the Medicaid rules treat different types of assets and income, as well as different types of ownership arrangements. In this chapter we will examine asset eligibility rules. The rules applicable to income are discussed in chapter 5.

The Medicaid application measures the amount of assets owned by the applicant on the application date for both single and married applicants. The application establishes that, as of the date of the application, the assets are at or below the allowable amounts. For a single person, the allowable amount of countable assets is $2,000. Planning for a married applicant also requires the preparation of an asset declaration that measures the amount of countable assets on the snapshot date. The snapshot date is the date that represents the first period after September 30, 1989, that the applicant has been in a hospital or nursing home or on a MI Choice Waiver (MI Choice) for a continuous period of 30 days or more. BEM Item 402 (under Definitions and Client’s Asset Eligibility, Presumed Asset Eligible Period). The amount of assets the applicant owns on the snapshot date is used to calculate the amount of assets the spouse is allowed to keep over and above the $2,000 in assets the applicant may retain. The amount of assets the spouse is allowed to keep is the protected spousal amount (PSA) (see §3.42).

Only countable assets, assets that are neither unavailable nor excluded, are counted for determining whether an applicant qualifies for Medicaid. You must first determine what countable assets exist in the estate (see §§3.3–3.25). Then you must determine the value of those assets (see §§3.26–3.39).

II.   Asset Eligibility Rules

§3.2   The asset eligibility rules for Medicaid assistance in a nursing home or through the MI Choice program are as follows:

The asset eligibility test requires that eligibility be met for at least one day in the month being tested. BEM Item 400 (under MA Asset Eligibility). This requirement means that even if the client becomes eligible for benefits only on the very last day of the month, the client is entitled to Medicaid benefits for the entire month.

It typically takes two or three months (sometimes longer) for the Department of Health and Human Services (DHHS) to process a Medicaid application (see §8.7). During the months that the application is pending, it is important for the applicant to remain financially eligible, as each of those months may be reviewed separately for eligibility.

Forms and Exhibits

Form 3.01 Affidavit of Unavailability by Nonspouse Co-Owner (Stock)
Form 3.02 Affidavit of Nonsalability (Real Estate)
Form 3.03 Affidavit of Nonsalability (Other Assets)
Form 3.04 Explanation of Nonsalability (Other Assets)
Form 3.05 Irrevocable Funeral Contract Certification (DHS-8A)
Exhibit 3.01 Medicaid Inflation Adjustment Table
Exhibit 3.02 Life Insurance Exclusions
Exhibit 3.03 Pooled Trusts in Michigan
Exhibit 3.04 Memorandum of February 5, 2014, RE: MI Choice Waiver Guidance in Establishing a Continuous Period of Care