All resources owned by a Medicaid applicant (or his or her spouse) are either countable or are exempt. You should always assume they are countable unless your attorney tells you otherwise.
Countable resources are further divided into liquid and non-liquid resources. A liquid resource can be converted into cash within 20 days. A non-liquid resource is one that cannot be converted into cash within 20 days. However, non-liquid resources can still cause you to be ineligible for Medicaid unless you are actively trying to sell them and you can prove to Medicaid that you are making a bona fide effort to sell them. There are rules concerning how to value non-liquid resources and what happens when you cannot liquidate them.
The general SSI resource exemptions are at 20 CFR § 416.1210 and Georgia’s rules cannot be more restrictive than SSI’s rules since the systems are linked. 20 C.F.R. § 416.1210. See 42 U.S. Code § 1382 and 42 U.S. Code § 1382b.
Exempt Resources.
Your home is exempt
Also, any land that is contiguous to your home is exempt. If the applicant is single and no qualifying person was living in the homme with the applicant, then the equity value is subject to an annual limit. In 2022, the equity limit is $636,000. As long as the applicant states an intention to return home (e.g., if I got better, then I would go home), Medicaid cannot touch the home until after the applicant dies. See 20 C.F.R. § 416.1212.
One vehicle of any value is exempt
If the applicant has more than one vehicle, then the most valuable vehicle will be exempt. Other vehicles will count toward the $2,000 resource limit. In Georgia, the fair market value shown on the tag receipt is the default value. Since vehicles are assessed at 40%, if the assessed value is the only value shown on the tag receipt, then you must multiply it by 2.5 to get the fair market value. One planning opportunity is trading in old clunkers and purchasing a new vehicle.
According to the SSI regulations, which bind Georgia Medicaid, a vehicle is totally excluded regardless of value if it is used for the transportation of the applicant or a member of the applicant’s household (e.g., a spouse or other dependent). See Subsection (b)(1) at 20 C.F.R. 416.1218. We prove “use” by getting photographs of you transporting the Medicaid applicant. Ideally, you would get photographs from multiple days, showing multiple trips.
Personal Items are exempt
Household goods such as furniture, appliances, electronic equipment (e.g., computers, TVs, radios), carpets, cooking and eating utensils, dishes, and other similar items are exempt. Clothing is exempt and personal jewelry ordinarily worn by the applicant or spouse are exempt. Items having an intimate relationship to the individual are also exempt, such as Personal jewelry including wedding and engagement rings, personal care items, prosthetic devices, and educational or recreational items such as books or musical instruments.
We also do not count as resources items of cultural or religious significance to an individual and items required because of an individual’s impairment. However, we do count items that were acquired or are held for their value or as an investment because we do not consider these to be personal effects. Such items can include but are not limited to: Gems, jewelry that is not worn or held for family significance, or collectibles. 20 C.F.R. § 416.1216. See also GA ABD Medicaid Manual 2319 .
Burial Exclusion.
We will explain Georgia’s burial exclusion on a different page, but essentially, Georgia applicants for long-term car Medicaid (e.g., nursing home, institutionalized hospice, and CCSP) are entitled to $10,000 burial exclusion.
Burial Space Items.
In Georgia, burial space items are fully exempt and do not count toward the $10,000 burial exclusion if they are paid in full (not financed). Generally, burial space items include burial plots, gravesites, crypts, mausoleums, urns, niches and other customary and traditional repositories for the deceased’s bodily remains provided such spaces are owned by the individual or are held for his or her use. Additionally, the term includes necessary and reasonable improvements or additions to or upon such burial spaces including, but not limited to, vaults, headstones, markers, plaques, or burial containers and arrangements for opening and closing the gravesite for burial of the deceased. 20 C.F.R. § 416.1231.
Property Essential to Self Support
Generally, these are resources used by the Community Spouse if the Community Spouse is still working. They would include things like tools of trade, a truck driven by a truck drive, etc. 2327 . 20 C.F.R. § 416.1220.
Retirement Funds.
In Georgia, the balance in a retirement fund is exempt for the applicant if it is in payment status. For retired individuals receiving required minimum distributions (RMD), your account is in payment status, so the balance is exempt. For younger applicants, we may need to place the account in payment status to cause the balance to be exempt. In Georgia, a Community Spouse’s retirement accounts are always exempt, although RMDs may be used in determining whether the Community Spouse is entitled to an income diversion from the Institutionalized Spouse. 2332
Resources inside a correctly established Special Needs Trust
A special needs trust is a tool usually used by an applicant under the age of 65, or is established by a third party such as a parent or grandparent for the use of an applicant. An individual applicant cannot establish a special needs trust for himself or herself once he or she is 65 years old. This rule appears at 42 U.S.C. section 1396p(d)(4)(A) and (d)(4)(C). There are two types of self-settled trusts: individual trusts and pooled trusts.
Usually, an individual trust will be established when the trust owns land or when it has more than $100,000. If the trust only has cash and the amount is less than $100,000, then it is usually more economical to use a pooled trust. A dying spouse can establish a trust in his or her Will for the benefit of a Medicaid applicant and, as of 2021, that trust (a testamentary trust) will be treated as an exempt third party trust. We will talk about special needs trusts elsewhere, but for now we are simply making you aware of this option. See (d)(4)(A) and (d)(4)(C) at 42 U.S. Code § 1396p.
Non-liquid resources where a bona fide attempt is being made to sell the resource.
Property where there is no legal right to sell. This exemption is similar to the one relating to non-liquid resources where a bona fide effort is being made to sell property. But it is different in some ways. When property is co-owned and the co-owner refuses to sell, the property might be exempt. If litigation would be required to sell the property, then it is exempt. If a court order restricts the individual’s right to sell the property, then it is exempt. Also, if a binding agreement restricts the right to sell, then it is exempt (although the binding agreement likely has to be more than 60 months old to avoid a transfer or resource penalty). POMS: SI 01120.010 – Factors That Make Property a Resource.
You should assume any resource that isn’t expressly exempt is countable until your attorney tells you otherwise. Exempt resources have a policy reason for the exemption. For example, if Medicaid made you sell your house and you got better, where would you go?
An individual must have the right, authority or power to liquidate property (or his or her share of property) for an item to be treated as a resource. 20 C.F.R. § 416.1201(a)(1). If a property right cannot be liquidated, the property will not be considered a resource of the individual (or spouse). Even when a resource is countable, only the equity value is counted. Equity value is the current market value less (1) the amount of principal owed; (2) any prepayment penalty; and (3) any other debts such as liens or loans. GA ABD Medicaid Manual 2303.
Examples of countable resources include:
- Cash
- Checking accounts (In general, all money in a financial account is treated as belonging to the applicant unless there is evidence that the money belongs to an account co-owner. 20 C.F.R. § 416.1208).
- Savings accounts
- Mutual funds
- Money market accounts
- Credit Union accounts
- Patient fund accounts held by a nursing home
- Annuities that do not meet Medicaid’s special rules concerning annuities
- Non-retirement investment accounts
- Certificates of Deposit (CDs)
- Stocks
- Bonds (except co-owned U.S. Savings bonds) GA ABD Medicaid Manual 2310
- Land that is not contiguous to the homeplace GA ABD Medicaid Manual 2329. Note: only the equity value counts. Also, co-owned land is presumed to be owned by each person named in the deed in equal percentages. GA ABD Medicaid Manual 2302
- Promissory notes from people that owe you money GA ABD Medicaid Manual 2313
- Vehicles other than the one exempt vehicle GA ABD Medicaid Manual 2308. Note: only the equity value counts
- Gold
- Coin collections (although Section 2399-3 of Georgia’s Medicaid Manual states that caseworkers must use the face value of the coin collection as the cash value) 2399.pdf (georgiamedicaidlaw.net)
- Art work
- Trusts (other than exempt special needs trusts) that could pay you income or principal or both GA ABD Medicaid Manual 2338.
- Life insurance policies with cash value if they do not qualify under the burial exclusion rules GA ABD Medicaid Manual 2323.
You should assume anything of value that could be converted to cash within 20 days is countable unless expressly exempt. For individuals, the countable resource limit is $2,000.
For married couples where there is a Community Spouse, the Community Spouse is entitled to an additional allowance from the countable resources (the Community Spouse Resource Allowance or CSRA) that changes each year. In 2022, the CSRA is $137,400.
Unless a different plan is developed, excess resources must be spent down.
