If you are worried that qualifying for Medicaid means spending down everything you have worked for, you are not alone. That fear keeps many people from planning until it is too late. The reality is that New York Medicaid distinguishes between assets that count against your eligibility and assets that do not. Understanding what you can keep may be more reassuring than you expect.
What Medicaid counts against you
When you apply for Medicaid, the state looks at what are called countable assets to determine your eligibility. These include cash, checking and savings accounts, certificates of deposit, stocks, bonds, mutual funds, additional real estate beyond your primary home, and life insurance policies with a cash value above $1,500.
If your countable assets exceed New York’s limits, you will generally need to spend them down or explore exempt planning options before Medicaid will cover your care.
What assets Medicaid does not count
The following assets fall outside Medicaid’s eligibility calculation entirely:
- Your primary home, if you live in it, intend to return or a spouse, minor child, or disabled child lives there. In that case, it is fully exempt with no equity cap. If none of those conditions apply, the home is exempt up to $1,130,000 in equity value. Keep in mind that while your home is protected during your lifetime, New York may pursue estate recovery after your death to recoup Medicaid costs.
- One vehicle, regardless of its value.
- Your personal belongings and household items, such as clothing and furniture.
- Irrevocable prepaid funeral arrangements, which are fully exempt with no dollar limit.
- Burial funds of up to $1,500 set aside in a separate account.
- Term life insurance, which carries no cash value and is not counted. Whole life or other policies with a cash value of $1,500 or less are also exempt.
- Your IRA or 401(k), if you are already taking regular distributions. Retirement accounts not yet in payout status are generally countable.
- Your share of marital assets, if your spouse needs long-term care. New York allows the at-home spouse to keep up to $162,660 in assets under the Community Spouse Resource Allowance, in addition to the family home, one vehicle and personal belongings.
If you are unsure which of your assets fall into each category, an estate planning attorney in Rochester can help you sort through the details before you apply.
Why knowing this matters before you apply
Understanding which of your assets are exempt gives you a clearer picture of what you actually need to protect and what strategies are available, such as converting countable assets into exempt ones or establishing a Medicaid Asset Protection Trust.
The families who fare best start this conversation early, well before a health crisis forces the issue. An estate planning attorney in Rochester can help you understand where you stand and what options remain available to protect what you have built.
