Roth IRA and Medicaid

Stu,

It doesn't look like it based on the link below. California has no asset tests for Medicaid and Michigan doesn't mention them. Although, sometimes these details only pop up when you are filling out the application.

(So, for example, I cannot get ACA coverage in California as my income is too low despite having what many would consider a pretty fat 401(k). I am redirected to Medicaid if I try to apply for ACA.)

Thanks. I knew that, in California, the ACA resulted in the elimination of means testing for people under 65. It just didn't occur to me when I was thinking about this situation.

Each state sets in own rules. Michigan: If on Medicare, the asset eligibility test for Medicaid includes all retirement accounts whether in payout status or not. Michigan expects all applicants to utilize their retirement accounts to fund care.

Thanks Alan. California has the same rule.

Addendum: but be careful.

Just because an asset doesn't disqualify a person from receiving Medicaid, does not mean the same asset cannot be clawed back to pay for the value of past Medicaid benefits.

S.

No, CA does not have the same rule. Retirement accounts in a payout status are exempt resources (not a countable asset). The payout counts as income but the value of the retirement account is exempt. Payout status means the individual is taking MRDs or is using a SEPP (substantially equal periodic payments). A Roth IRA that is not in a payout status, would be a countable asset. The only Roth IRAs that could be in a payout status are inherited Roths.

I think this correct if the Medicaid is being used to pay for a nursing home or long term care. But I think if one is on Medicare, but is using the Medicaid for something other than nursing home / long term care, there may be fewer asset tests.

Here is a link from Nolo Press on the first point above, but it provides no guidance on the second point. So, I am unsure.

CA Regulation Title 22 §50402(e)) or just read this: