4. Asset Limitations (Exempt vs. Available) – Medicaid divides assets into two categories: Exempt and Available. Exempt assets are specifically designated under the rules, and ownership of an exempt asset by the applicant will not result in a denial of benefits. If an asset is not listed as exempt then it needs to be liquidated and applied toward the costs of nursing home care before the applicant can receive Medicaid benefits. The state has a look back period of 5 years with a penalty for people who sell assets below fair market price, transfer assets to others, or give money and property away.
Exempt Assets for an applicant in New Jersey include:
i. Resources owned jointly between an institutionalized and a community spouse can be transferred with no period of ineligibility. Transfer of resources, either owned by the institutionalized or community spouse, but not owned jointly, are subject to penalty if transferred incorrectly. ii. One home is exempt (equity limit $858,000) if planning to return, a spouse, a child under 21, or a disabled person resides in it. Whenever an institutionalized person sells a previously exempted residence, the money from the sale becomes a countable asset. The recipient may then lose eligibility for Medicaid until he/she has spent down the money and their countable resources are once again less than the maximum. iii. One car. iv. An irrevocable funeral trust, no amount specified. v. Life insurance policy if the face value of said policy is $1,500 or less. There is no limit on term life insurance policy since this has no cash value. vi. $2,000 or less in cash/non-exempt assets if single. If the assets exceed the limit on the first of the month the applicant is ineligible for the entire month.
Amount of assets community spouse may retain: The community spouse can keep non-exempt resources owned by one or both spouses with a maximum of $123,600. If the community spouse’s assets do not equal the minimum of $24,720, the community spouse is able to retain assets from the institutionalized spouse until the minimum is reached. Community spouse impoverishment protection: The community spouse can keep part of the institutionalized spouse’s income if the community spouse has an income of less than $2,030 per month. The maximum amount a community spouse may keep is $3,090 per month depending upon living expenses. New Jersey is an “income first” state, meaning the state limits the right to petition for an increased community spouse resource amount (CSRA) to couples whose combined income fails to meet the community spouse’s income needs. Basically, this means a community spouse can petition for an increased CSRA where there’s an income gap only after factoring in the nursing home spouse’s income first.
New Jersey long term care insurance partnership:
This is a program between the state and private insurance companies. Partnership policies protect assets by matching dollar for dollar what policy holders pay into their policies. For example, if you bought a Partnership Policy with a maximum benefit payout of $155,000 then you are able to protect $155,000 of your assets. For married couples each spouse needs to purchase their own policy. Once the $155,000 worth of long term care coverage is used, you may apply for Medicaid with $155,000 worth of assets exempted. Request Information
Department of human services- Aged, Blind, and Disabled: http://www.state.nj.us/humanservices/dmahs/clients/medicaid/abd/
Department of human services- Medicaid Managed Long Term Services and Supports (MLTSS): http://www.state.nj.us/humanservices/dmahs/home/mltss.html