Will Father’s IRA Disqualify Mother for Medicaid?

There is no easy answer to this question, as the answer is state-specific. In some states, your father’s IRA would disqualify your mother from Medicaid, and in other states, it would not.

Let’s back up and lay some groundwork. When one spouse of a married couple applies for Nursing Home Medicaid, the assets of both spouses are considered when determining eligibility. Stated differently, the assets are considered jointly owned and the couple must have assets at or below a certain level in order for the applicant spouse to meet Medicaid’s asset limit.

While the asset limit varies depending on the state in which one resides, generally speaking, the applicant spouse (the institutionalized spouse) is able to retain up to $2,000. The non-applicant spouse (the community spouse), however, is able to keep a larger amount of the couple’s assets as a Community Spouse Resource Allowance. If the couple’s assets are greater than the allowable amounts, the applicant spouse is not eligible for Medicaid until the excess assets are “spent down” to the asset limit.

There are several assets that are not counted towards Medicaid’s asset limit. This includes the couple’s primary home (given the non-applicant spouse continues to live in it), household furnishings and appliances, a motor vehicle, and in some states, IRAs.

Approximately 50% of the states exempt (do not count) a non-applicant spouse’s IRA. However, some of these states require that the IRA owner be receiving the Required Minimum Distribution (RMD) in order for the IRA to be exempt. Worth noting, there are also some states that do not count the applicant spouse’s IRA, most of which require the RMD be taken. See which states exempt an IRA.

To summarize, in the states that count your father’s IRA towards Medicaid’s asset limit, your mother could be disqualified from receiving nursing home benefits. Of course, this is dependent on the value of the IRA and the amount of other assets owned by your parents.