Medicaid does not automatically disqualify you for having a savings account
You can have a savings account and still receive Medicaid, but the amount of money in that account matters. Medicaid programs have asset limits — a maximum amount of money and property you can own and still be found may be able to access. If your savings exceed that limit, you will not be found may be able to access until your balance drops below it. The limit varies by state and by which Medicaid program you are applying for, so the first step is finding out what your state's limit actually is.
The asset limit is not the same as an income limit. Income is what you earn each month; assets are what you already have. Medicaid counts both, but they are separate thresholds. You could have low income and still be disqualified if your savings are too high, or vice versa.
Key Takeaways
- Most states set Medicaid asset limits between $2,000 and $2,500 for individuals, though some states have higher limits or no limit at all.
- Certain savings accounts and assets do not count toward the limit, including retirement accounts, a primary home, and one vehicle in most states.
- Your state Medicaid office can tell you the exact asset limit and which accounts count toward it — this varies significantly by location.
- If your savings exceed the limit, you can spend down the excess on medical bills, home repairs, or other allowed expenses before reapplying.
How states set asset limits and what counts
Asset limits are set by each state, not by the federal government, which means the number you need to know depends on where you live. Most states use $2,000 as the limit for an individual and $3,000 for a married couple, but some states have raised these limits or eliminated them entirely. A handful of states have no asset limit at all for certain Medicaid programs.
Not all savings count the same way. Your primary home, one vehicle, retirement accounts like a 401(k) or traditional IRA, and certain other assets are usually excluded — meaning they do not count toward your limit even if they have substantial value. The rules for what is excluded vary by state, so a savings account that does not count in one state might count in another.
Cash, checking accounts, savings accounts, money market accounts, and certificates of deposit all count toward your asset limit. So do stocks, bonds, and cash value in a life insurance policy. If you have money in any of these places, add it up to see whether you are under or over your state's limit.
Finding your state's specific asset limit
Your state Medicaid office publishes its asset limits in writing, usually on its website or in a policy manual. The fastest way to find the number is to call your state Medicaid office directly and ask for the asset limit for the program you are interested in — for example, "What is the asset limit for regular Medicaid?" or "What is the asset limit for Medicaid for the elderly?" Different programs within the same state sometimes have different limits.
If you cannot reach your state office by phone, you can also contact your local county social services office, which administers Medicaid applications. They can tell you the limit and which assets your state excludes. Having this information before you apply saves time and prevents surprises later.
What happens if your savings are over the limit
If your savings exceed your state's asset limit, you will not be found may be able to access for Medicaid until your balance drops below it. This does not mean you have to give the money away. You can spend down your excess savings on allowed expenses, which reduces your balance to below the limit and makes you may be able to access to apply.
Allowed spend-down expenses typically include medical bills you owe, dental work, eyeglasses, hearing aids, home repairs, property taxes, and funeral or burial costs. Some states allow you to spend down on rent or utilities as well. The key is that the money has to go toward a real expense, not just be transferred to someone else or hidden.
Once you spend your savings down to below the limit, you can apply for Medicaid. Some states allow you to apply before you have finished spending down, as long as you have a plan to reach the limit by a certain date. Ask your state Medicaid office whether they allow this, because it can speed up the process.
Medicaid programs with different or no asset limits
Some Medicaid programs have higher asset limits or no asset limit at all. Medicaid for the elderly and disabled (sometimes called SSI-related Medicaid) typically uses the standard $2,000 limit. But Medicaid for pregnant women and children often has much higher limits or no limit, depending on the state. Medicaid expansion programs (available in states that expanded Medicaid under the Affordable Care Act) sometimes have no asset limit at all.
If you do not meet the asset limit for one Medicaid program, you might still be found may be able to access for a different one. For example, you might be over the limit for regular Medicaid but under the limit for a pregnancy-related program, or vice versa. Your state Medicaid office can tell you which programs you might be found may be able to access for based on your age, income, and assets.
Protecting retirement accounts and other excluded assets
If you have money in a retirement account like a 401(k), traditional IRA, or Roth IRA, that money usually does not count toward your Medicaid asset limit, even if the account has a large balance. The same is true for your primary home and, in most states, one vehicle. These exclusions exist specifically to prevent Medicaid rules from forcing people to liquidate retirement savings or sell their home.
However, the rules for what is excluded can be complex and vary by state. For example, some states exclude only the first $500,000 of home equity, or only if you live in the home. Some states have different rules for IRAs versus 401(k)s. Before you assume an asset is excluded, ask your state Medicaid office to confirm.
If you are close to the asset limit and have money you could move into a retirement account, talk to a tax professional or benefits counselor first. Moving money into a retirement account specifically to avoid the asset limit can be considered a transfer for less than fair market value, which some states penalize. The rules are strict, and mistakes can delay your Medicaid approval.
Frequently Asked Questions
Do I have to report my savings account when I apply for Medicaid?
Yes. You will be asked to report all your assets, including savings accounts, checking accounts, and cash on hand. You will usually need to provide bank statements or other proof of the balance. Lying about your assets can result in your application being denied or your benefits being terminated if discovered later.
What if I have a joint savings account with someone else?
The rules for joint accounts vary by state. Some states count the entire balance toward your asset limit, while others count only your share. Ask your state Medicaid office how they treat joint accounts, and bring documentation showing who owns what portion of the account if you have one.
Can I move money to a family member to get under the asset limit?
Transferring money to a family member specifically to avoid the asset limit is considered a transfer for less than fair market value. Most states penalize this by making you ineligible for Medicaid for a period of time. The penalty period depends on how much you transferred and your state's rules. Do not do this without talking to a benefits counselor first.
If I get a tax refund or inheritance, will that push me over the asset limit?
Yes, any money you receive — including tax refunds, inheritances, or gifts — counts toward your asset limit once it is in your account. If receiving money would push you over the limit, you can spend it on allowed expenses before it counts, or you can let your Medicaid benefits end temporarily and reapply once the money is spent down.
Do I lose Medicaid if my savings go over the limit after I am already approved?
Most states check your assets only when you apply or renew your Medicaid. If your savings increase after you are approved, you usually do not lose benefits immediately. However, when you renew your Medicaid (usually once a year), your assets will be checked again. If you are over the limit at that time, your benefits may not be renewed. Check your state's rules, because some states do periodic asset checks even between renewals.