When a family learns that a loved one may need nursing home care, the first question is often about money. Specifically, how much will Medicaid require you to give up before it will help? The answer depends heavily on which assets you have and how they are classified. Medicaid planning begins far earlier than you may otherwise think, and you must first know which assets you can and cannot keep.
Countable vs. Exempt: The Core Distinction
Medicaid divides assets into two categories: countable and exempt. Countable assets are added together and measured against Pennsylvania’s eligibility limits. Exempt assets are excluded from that calculation entirely, meaning they do not need to be spent down before Medicaid will approve an application.
This distinction matters enormously. A family that understands it going in is far better positioned than one that assumes everything must go.
Assets Pennsylvania Medicaid Typically Exempts
While specific rules can vary based on individual circumstances, Pennsylvania generally excludes the following from its Medicaid asset calculations:
- The primary residence, when the applicant intends to return home, or a spouse, minor child, or dependent relative lives there
- One motor vehicle, used for transportation or medical appointments
- Household furnishings and personal belongings, such as clothing and jewelry
- Prepaid funeral and burial arrangements, including a burial plot and related expenses
- Term life insurance policies that carry no cash value
- Business property that is essential to the applicant’s means of self-support
For married couples, the protections go further. The spouse remaining at home is entitled to keep a portion of the couple’s countable assets through the Community Spouse Resource Allowance, which in Pennsylvania can be a significant sum adjusted annually by the federal government. The amount of the CSRA is typically raised yearly, and it allows a spouse to keep some savings.
The Home: A Closer Look
The family home deserves special attention because it is often the most valuable asset a family owns and also one of the most misunderstood. While the home is exempt during the applicant’s lifetime under the right conditions, Pennsylvania operates a Medicaid Estate Recovery Program. This means the state may seek reimbursement from the estate after the Medicaid recipient passes away.
Proper planning can address this risk. Strategies such as irrevocable trusts or transfers to qualifying family members, when structured correctly and within the lookback rules, can help protect the home for the next generation.
What Families in State College Should Know
Asset exemptions are only half the picture. Knowing which assets are protected is valuable, but knowing how to structure your finances around those exemptions is where the real planning begins. Mistakes made before or during the application process can result in penalties, delays, or unexpected spend-down requirements.
Working with an experienced elder law attorney before a crisis occurs gives families in Centre County the best possible chance of protecting what they have built over a lifetime.
Kreisher Marshall & Associates, LLC helps families understand their options and build a plan that works. Call 814-458-6294 or message us online to speak with our team.