What are some legal ways to reduce assets for Medicaid coverage?

On Behalf of | May 28, 2020 | Medicaid eligibility |

To qualify for Medicaid, you have to meet income guidelines. The government will consider assets you own as part of your income. For this reason, if you need medical coverage through this program, you will have to be sure you come in under the income guidelines. 

For many people, having too many assets is an issue, but the rules of the program do not make it easy to reduce your assets. You will get some exemptions, but if you are still over the limit, Medicaid will want you to use your assets to pay for your medical care first before approving you for coverage. If you wish to preserve your assets, you have some legal options. 

Prior to the look back period 

If you can plan ahead of time, AgingCare explains that you can transfer assets or sell them before it will impact your qualification for the program. However, you need to know that Medicaid has a look-back period where it will examine your assets for a certain time prior to your application. If you sell or otherwise get rid of assets during this time, it will create issues. So, you need to act before you enter the look-back period. 

Spousal exemptions 

You can also make use of the exemptions the program allows for your spouse. You can transfer some assets to your spouse who is not on Medicaid. Any such transfers are not part of the look-back period and will not count against you. 


You can also put assets in irrevocable trusts. Although, you should use these with caution. You cannot get access to the assets in this type of trust after you create it.