When applying for Medicaid, assets are divided into two categories: countable and non-countable. Countable assets are considered liquid (readily available) to pay for long term care needs and the state generally expects those assets to be used first before receiving a government benefit. Non-countable assets aren’t included in the amount of assets Medicaid expects you to use to pay for your own care.

Protect savings by spending on “non-countable assets”:

• Prepay funeral expenses
• Small amount of life insurance
• Pay off mortgage
• Home repairs
• Replace old auto
• Update home furnishings
• Pay for more care at home
• Buy new home

Countable assets (which vary by state) are used in determining financial eligibility for Medicaid. They include:

• Vehicles other than the one used primarily for transportation
• Life insurance with a face value over $1,500
• Bank accounts and trusts
• Your home provided that your spouse or child does not live there and its equity value is greater than $500,000 ($750K in some states)

The bottom line is that a long term care insurance policy can help protect your clients’ assets by avoiding the spend-down required by governmental assistance entities; and your clients’ family assets by avoiding them having to pay for the care.