Cryptocurrency’s impact on Medicaid eligibility

Yes, in short, owning cryptocurrency can impact Medicaid eligibility and can cause one to be denied Medicaid eligibility (or lose Medicaid eligibility). Called “crypto” for short, it is a digital currency / virtual currency (i.e., Bitcoin, Ethereum, Litecoin, Monero and Dogecoin) that can be used as a form of payment via an online system. This tradable asset, in and of itself, has no intrinsic value. Instead, it is based on supply (how much is available) and demand (how many persons want it).

Medicaid’s Asset Limit & Crypto
For long-term care Medicaid, there is an asset limit, and in most states, Medicaid considers cryptocurrency to be a countable asset. In other words, its current market value is counted toward Medicaid’s asset limit. The way a state calculates this value may differ based on the state, but generally a Medicaid applicant must provide a current statement of their crypto account(s) at the time of Medicaid application (as well as at Medicaid redetermination). If the crypto is listed in an exchange (a platform where crypto can be bought, sold, and traded), that exchange is used to determine its value in US dollars. If one’s crypto is not part of an exchange, an alternative state-specific method of calculating its value is used.

Unfortunately, if an applicant owns cryptocurrency and its value pushes their assets over the limit, they will be denied Medicaid eligibility (or if a current Medicaid beneficiary, they can lose their eligibility at redetermination). Worth noting, the asset limit in the majority of states is $2,000. See state-specific asset limits.

For Medicaid applicants who own cryptocurrency, it is very important that it be reported during the application process. One should never try to hide assets from Medicaid. Doing so is illegal and can result in serious consequences. Furthermore, one should not gift assets as a means to become eligible for long-term care Medicaid. There is a Look-Back Period (generally 60-months), during which Medicaid scrutinizes all asset transfers immediately preceding application to ensure no assets were gifted during the “look back”. Persons who violate this rule are penalized with a Penalty Period of ineligibility. The length of ineligibility is based on the amount one gifted and the average cost of nursing home care in one’s state of residence.
For persons who have assets over their state’s Medicaid asset limit (due to crypto or any other assets), Medicaid Planners can provide assistance in implementing Medicaid planning strategies to lower countable assets for Medicaid qualification purposes. Find a Certified Medicaid Planner.

Medicaid’s Income Limit & Crypto
Medicaid also has an income limit, and if cryptocurrency is received as a gift or as a form of payment, Medicaid will likely count it as income in the month it is received. Additionally, if one owns crypto and sells it, any capital gains (profit) may count as income during the month of receipt. For long-term care Medicaid, the income limit is often based on 300% of the SSI Federal Benefit Rate. However, the income limit can vary based on the state and the specific Medicaid program. See state-specific income limits.
It is possible for persons over Medicaid’s income limit to still be eligible for long-term care Medicaid.

Check Your State’s Rules
Medicaid rules and regulations tend to vary based on the state, and therefore, it is vital that one check the policies surrounding Medicaid and cryptocurrency in their state. Additionally, not all states specifically mention crypto in their Medicaid policy, adding a further layer of complexity to this topic. See contact information for state Medicaid agencies.