Medicaid is a federal program that provides additional coverage for seniors who have a low income. These additional services can help your parents pay for their long-term care needs, such as nursing facility costs. It also covers items that Medicare does not, such as eyeglasses and hearing aids. Qualifying for Medicaid requires meeting specific income limits.
The limits change regularly, but the government always bases them on the federal poverty level. According to Medicaid.gov, the Medicaid limits that apply to your parents depend on their Medicare status. Limits include those for the amount of income your parents can earn in one month and the value of their assets. If you have concerns about whether your parents must sell their assets, then you need to check into the asset limits.
Exempt assets
According to the U.S. Department of Health and Human Services, not every asset that your parents own counts against them for Medicaid eligibility. Exempt assets include one vehicle, life insurance with a value under $1,500, some trust assets, their home and some burial arrangements.
Your parents’ home must meet value limits to remain exempt. Looking at the equity that your parents have in their home, it must be below a certain level. You can figure the equity based on the fair market value and whether your parents have a mortgage. Like the income levels, the allowable exemption value changes regularly, and this limit is state-specific.
Countable assets
There are some assets your parents own that will count against them for Medicaid eligibility. These include any other property they own and any additional vehicles. If they own stocks or bonds or have money in a checking or savings account, these will also count against their limit. The government will look at all the assets your parents own and look back for a period at assets that they may have owned but sold or transferred.