Having money in the bank can disqualify you from Medicaid, but the rules depend on which Medicaid program you are trying to enter and which state you live in.

Medicaid looks at your resources — cash, savings accounts, investments, and property you own — not just your monthly income. If your resources are above a certain limit, you will not be found may be able to access, even if you earn very little. The limit varies sharply by state and by the type of Medicaid you need. Some states have no resource limit at all. Others set it as low as $2,000 for an individual or $3,000 for a couple.

The amount that counts toward the limit also depends on what kind of Medicaid program you are explore for. A retirement account may not count. A house you live in usually does not count. A car typically does not count. But a savings account, a money market account, or cash under your mattress all count as resources and will be added up against your limit.

Key Takeaways

  • Most states have a resource limit between $2,000 and $3,000 for regular Medicaid, though some states have no limit at all.
  • Your primary home and one vehicle usually do not count toward the resource limit, but savings accounts and cash do.
  • Medicaid programs for seniors and people with disabilities often have higher resource limits or no limit, depending on your state.
  • You should contact your state Medicaid office directly to learn the exact resource limit that applies to you, because the rules change by program and state.

Which Medicaid programs have resource limits

Not all Medicaid programs count resources the same way. Traditional Medicaid — the program most working-age adults and families enter — has resource limits in most states. Medicaid expansion — the program created by the Affordable Care Act — has no resource limit in any state. If you are under 65 and earn below your state's income threshold, you may be able to enter expansion Medicaid regardless of how much money you have in the bank.

Medicaid for seniors (people 65 and older) and Medicaid for people with disabilities often have higher limits or no limits at all. Supplemental Security Income (SSI) Medicaid, which covers people receiving SSI cash benefits, has a $2,000 resource limit for individuals and $3,000 for couples in most states. But Medicaid for the Elderly and Disabled (MED) or similar state programs may have no resource limit.

The program you enter depends on your age, income, and whether you have a disability. Your state Medicaid office can tell you which program you would enter and what its resource limit is.

What counts as a resource and what does not

Cash in a checking account, savings account, or money market account counts toward your resource limit. So does cash you keep at home. Stocks, bonds, and other investments count. A second home or rental property counts. A boat or recreational vehicle counts.

Your primary home — the house or apartment you live in — does not count, no matter how much it is worth. One vehicle does not count, as long as it is used for transportation. A retirement account like an IRA or 401(k) usually does not count, though the rules vary by state and program. Life insurance does not count. Household goods and personal items do not count.

Some states have additional exclusions. A burial plot may not count. Funds set aside for a child's education may not count. Ask your state Medicaid office for the complete list of what counts in your state.

How much money disqualifies you

In most states, if you are a single person and have more than $2,000 in countable resources, you will not be found may be able to access for traditional Medicaid. If you are married or part of a couple, the limit is usually $3,000. However, some states have raised these limits. A few states have no resource limit at all. California, for example, has no resource limit for most Medicaid programs.

If you are 65 or older or have a disability, your state may have a higher limit or no limit. Some states use a spend-down process: if you are over the limit, you can spend down your resources on medical care or other allowed expenses until you fall below the limit, then you become may be able to access.

Because the limits vary so much, you cannot know whether your bank balance disqualifies you without checking with your state. Contact your state Medicaid office or visit its website to find the exact resource limit for the program you are interested in.

How Medicaid counts money in joint accounts

If you have a joint bank account with someone else, Medicaid counts the entire balance as your resource, even if the other person contributed most of the money. This is true whether the other person is your spouse, an adult child, or anyone else. The assumption is that you have access to all the money, so all of it counts.

If you want to reduce your countable resources, you can remove your name from a joint account or transfer your share to someone else. However, if you transfer money to someone else within a certain time period before you explore for Medicaid — usually 60 months (five years) — Medicaid may penalize you by delaying your may be able to access. This is called the look-back period. The rules are complex and vary by state, so talk to your state Medicaid office or a legal aid attorney before moving money around.

Strategies to reduce countable resources

If you are over the resource limit, you have a few options. You can spend down your resources on allowed expenses. Medical bills, dental work, eyeglasses, and hearing aids are common spend-down expenses. Some states allow you to spend down on home repairs, vehicle repairs, or funeral expenses. Ask your state Medicaid office what expenses count in your state.

You can also move money into resources that do not count. For example, you could put money into a burial fund (which does not count in most states) or pay down your mortgage on your primary home (which does not count). You could buy a vehicle if you do not have one, or repair or replace your current vehicle. Again, the rules vary by state, so check first.

If you are 65 or older or have a disability, you may be able to set up a special needs trust with an attorney. Money in a properly structured trust may not count as your resource. This is a legal tool that requires professional help, but it can protect assets while you receive Medicaid.

What happens if you inherit money while on Medicaid

If you inherit money or receive a lump-sum payment while you are already on Medicaid, you must report it to your state Medicaid office. The inheritance counts as a resource. If it pushes you over the limit, your Medicaid coverage will end unless you spend it down or move it into an excluded resource.

Some states give you a grace period to spend down an inheritance. Others require you to spend it when ready. The timing matters because of the look-back period: if you give the money away to avoid the resource limit, Medicaid may penalize you. Report any inheritance or large payment to your Medicaid caseworker right away so you understand your options.

Frequently Asked Questions

Does Medicaid expansion have a resource limit?

No. Medicaid expansion, created by the Affordable Care Act, has no resource limit in any state. If you are under 65 and your income is below your state's threshold (usually around 138% of the federal poverty level), you can enter expansion Medicaid regardless of how much money you have in the bank.

If I have $5,000 in savings, can I still get Medicaid?

It depends on your state and which Medicaid program you are explore for. In most states, $5,000 is over the limit for traditional Medicaid. But if you are may be able to access for Medicaid expansion, you can get it. If you are 65 or older or have a disability, your state may have a higher limit. Contact your state Medicaid office to find out.

Do retirement accounts count toward the resource limit?

In most states, IRAs and 401(k)s do not count as resources for Medicaid purposes. However, the rules vary by state and program. Some states may count them if you have already started withdrawing from them. Ask your state Medicaid office whether your specific retirement account counts.

What if I spend my money down to get under the limit — is that allowed?

Yes, you can spend down your resources on allowed expenses like medical care, home repairs, or a vehicle. However, if you give money away to someone else to avoid the resource limit, Medicaid may penalize you by delaying your may be able to access. The look-back period is usually five years. Talk to your state Medicaid office or a legal aid attorney before moving money around.

Can I put money in a trust to protect it from the resource limit?

A properly structured special needs trust may protect assets from counting toward the resource limit, but this requires legal help and must be set up correctly. Contact a legal aid organization in your state or an attorney who specializes in Medicaid planning to learn whether a trust would help in your situation.