Georgia Medicaid Treatment of Retirement Plans

grandparents with grandchildren

Many Georgia seniors have hard-earned savings in retirement plans. When those individuals plan for their long-term care and nursing home needs, questions often arise about how retirement plan assets affect eligibility for Georgia Medicaid benefits for those needs. While the answer is somewhat complicated, our Medicaid planning attorneys provide general guidance about retirement plans and Medicaid eligibility in the discussion that follows.

Medicaid Asset and Income Limitations

Medicaid long-term care eligibility for seniors age 65 and older or blind or disabled is subject to strict requirements, including asset and income limitations. Generally, non-exempt assets may not exceed $2,000. The monthly income limit is currently $2,130. If an individual is married, additional rules and allowances apply to the spouse.

The financial eligibility rules provide for exemption of certain assets in calculating whether an individual meets the asset requirements. In addition, strategies are available to protect certain assets from being counted. However, Medicaid has a five-year look back period for asset transfers that makes protecting assets a challenge.

An individual should never attempt to qualify for Medicaid by transferring or otherwise changing the nature of assets without consulting with an experienced nursing home and Medicaid planning professional. Doing so creates substantial risks that could lead to ineligibility for a considerable period of time.

Georgia Medicaid Rules For Retirement Plans

Each state sets many of its own rules for Medicaid eligibility. That is particularly true for treatment of retirement plans — the rules vary greatly from state to state.

Georgia’s rules for retirement plans are complex. In the following summary, our Medicaid planning attorneys provide a general summary of how Georgia treats retirement accounts for Medicaid eligibility. However, please remember that application of the rules to your specific circumstances requires analysis by a Medicaid planning professional.

The primary rule in Georgia is that retirement accounts like IRAs, 401(k)s, and pensions are excludable from the asset calculation if the account owner receives distributions in periodic payments that include principal. So, for example, if your IRA is in payout status on account of your age, it will not count as an asset. However, the distributions count as income in the month received for purposes of the income limitation. In other words, if your IRA is not yet in payout status, it will count as an asset for purposes of Medicaid eligibility. If your IRA is in payout status, it likely will not count as an asset, but the payouts will count as income.

Some retirement accounts, such as Roth IRAs, may not be subject to mandatory payouts at any point. As such, those accounts count as assets in the Medicaid eligibility calculations. A healthy spouse’s retirement account usually is exempt from the calculation, even if not in payout status.

If your retirement account(s) put you over the asset or income limits for Medicaid eligibility, there are mechanisms available under the rules that may still enable you to qualify for Medicaid benefits. To determine whether your circumstances enable you to use any of those strategies, it’s essential to consult with a Georgia Medicaid planning professional.

Qualifying For Medicaid If You Are Over the Asset or Income Limit

Professional Medicaid planners, like our attorneys at Asset Protection & Elder Law of Georgia, often can help you structure your finances to become eligible for Medicaid benefits, even if it first appears that you may be over the asset or income limitations. Medicaid planners utilize a wide range of sophisticated permissible tools and strategies to protect your assets while meeting the stringent Medicaid requirements.

If retirement plan payouts put you over the income limitation, one strategy that often can help is use of a Qualified Income Trust or Miller Trust. Money deposited in a Miller Trust does not count toward the Medicaid income calculation. The money in the trust is available to cover very specific services for the individual who creates the trust. Our previous blog post, How Does a Qualified Income Trust (Miller Trust) Help Medicaid Eligibility in Georgia, provides additional details about how this type of trust works.

If you are over the asset limits because of your retirement account, other strategies are available to help you qualify under Medicaid rules. Having your financial situation evaluated by a Georgia Medicaid planning professional is the only way to ascertain whether you can structure your finances in a way that enables you to become eligible.

All Medicaid rules are extremely complicated. Applying them to a specific situation requires careful analysis. Because of the Medicaid five-year look-back period, early planning for long-term and nursing home care can make a significant difference in what strategies are available to a client.

Additional Georgia Medicaid Information

Our Medicaid planning attorneys provide additional information about eligibility issues in other blog posts. In addition to the articles linked in the discussion above, these other posts may be helpful:

Talk With a Georgia Medicaid Planning Lawyer About Retirement Plans & Medicaid Eligibility

In our Cartersville elder law practice at Asset Protection & Elder Law of Georgia, Medicaid planning and nursing home planning are essential parts of our services for many clients. If you have questions about your retirement plans or other questions about Medicaid eligibility in Georgia, we can answer all your questions and help you make the right decisions.

We provide elder law and planning services to clients throughout the communities northwest of Atlanta, including in Bartow County, Cobb County, Cherokee County, Gordon County, Floyd County and Paulding County. Call us at (770) 382-0984 or contact us through our online form.