Roth IRA and Medicaid

[Stuart O. Bronstein]

Does anyone here know if a Roth IRA is counted as an asset for Medicaid
purposes? Or is that determined at the state level?

I'm looking particularly for the rule in Michigan. I saw an indication
in one state that it's only considered an asset after a person starts
taking distributions after retirement. But I haven't been able to
determine if that's a federal rule, or if I even have understood that
rule correctly.

Any enlightenment would be greatly appreciated.

Thanks.

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Stu
http://DownToEarthLawyer.com

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[spop...@gmail.com]

On Wednesday, April 8, 2020 at 11:23:51 AM UTC-7, Stuart O. Bronstein wrote:
> Does anyone here know if a Roth IRA is counted as an asset for Medicaid
> purposes? Or is that determined at the state level?
>
> I'm looking particularly for the rule in Michigan.

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.)

https://www.michigan.gov/healthymiplan/0,5668,7-326-67874---,00.html

[Stuart O. Bronstein]

spop...@gmail.com wrote:
> Stuart O. Bronstein wrote:

>> Does anyone here know if a Roth IRA is counted as an asset for
>> Medicaid purposes? Or is that determined at the state level?
>>
>> I'm looking particularly for the rule in Michigan.
>

> 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.)
>
> https://www.michigan.gov/healthymiplan/0,5668,7-326-67874---,00.ht
> ml

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.

--
Stu
http://DownToEarthLawyer.com

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[Alan]

On 4/8/20 11:22 AM, Stuart O. Bronstein wrote:
> Does anyone here know if a Roth IRA is counted as an asset for Medicaid
> purposes? Or is that determined at the state level?
>
> I'm looking particularly for the rule in Michigan. I saw an indication
> in one state that it's only considered an asset after a person starts
> taking distributions after retirement. But I haven't been able to
> determine if that's a federal rule, or if I even have understood that
> rule correctly.
>
> Any enlightenment would be greatly appreciated.
>
> Thanks.
>

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.

[Stuart O. Bronstein]

Alan <temp...@vacationmail.com> wrote:

> 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.

--
Stu
http://DownToEarthLawyer.com

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[spop...@gmail.com]

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.

[Alan]

On 4/8/20 6:09 PM, Stuart O. Bronstein wrote:
> Alan <temp...@vacationmail.com> wrote:
>
>> 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.
>

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.

[spop...@gmail.com]

On Friday, April 10, 2020 at 4:13:13 PM UTC-7, Alan wrote:
> On 4/8/20 6:09 PM, Stuart O. Bronstein wrote:
> > Alan <temp...@vacationmail.com> wrote:
> >
> >> 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.
> >
> 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.

https://www.nolo.com/legal-encyclopedia/when-californias-medi-cal-will-pay-nursing-home-assisted-living-home-health-care.html

Steve

[Alan]

CA Regulation Title 22 §50402(e)) or just read this:
http://www.canhr.org/factsheets/medi-cal_fs/PDFs/FS_IRAsPensions.pdf