What Assets Won't Hurt Your Medicare Savings Program Application

Assets that don't count toward the resource limit

When you apply for a Medicare Savings Program, the program counts your assets to see whether you fall under the resource limit — but not all assets count. Your home, your car, your household goods, and your life insurance policy are excluded from the calculation. Neither are funeral or burial accounts set aside specifically for those expenses. The programs also don't count food, clothing, or medical equipment you own.

This matters because the resource limits are tight. For 2024, most Medicare Savings Programs set the limit at $8,100 for a single person or $12,150 for a married couple, though these amounts change yearly. Knowing what doesn't count can mean the difference between being over the limit and under it.

Key Takeaways

• Your primary residence, one vehicle, and household goods do not count as resources, no matter their value.
• Burial and funeral accounts set aside in advance are excluded, as long as they are designated for that purpose.
• Life insurance policies with a face value under $1,500 do not count; policies above that amount may count depending on the program and state.
• Accounts held in trust for a disabled or blind family member may be excluded under certain conditions.
• The resource limit changes each year, so you should check the current year's limit before you submit information.

Your home and one vehicle are always protected

The equity in your primary residence — the house or mobile home where you actually live — is not counted as a resource, regardless of how much it is worth. This protection applies even if you own your home outright or still owe a mortgage. The same goes for one vehicle, no matter its value, as long as it is used for transportation for you or your family.

If you own a second vehicle or a vacation property, those do count. But your everyday home and your everyday car are safe. This is one of the most important exclusions because housing and transportation are often a person's largest assets.

Household goods and personal items

Furniture, appliances, clothing, dishes, tools, and other items you use in your home or for daily life are not counted. This includes items with real value — an antique dresser, a good bicycle, a computer you use for work. The programs do not ask you to list these or prove their value.

Medical equipment and supplies you own are also excluded: wheelchairs, walkers, oxygen equipment, diabetic testing supplies, and similar items. Hearing aids and eyeglasses do not count either. The logic is that these items are necessary for your health or daily functioning, not wealth you could convert to cash.

Burial and funeral accounts set aside in advance

If you have opened a burial or funeral account and designated it specifically for your funeral or burial expenses, that money is excluded from the resource count. The account must be irrevocable — meaning you cannot withdraw the money for other purposes — and it must be clearly set aside for burial or funeral costs only.

Some people set aside money in a regular savings account and call it a burial fund, but that does not work. The account has to be a formal burial or funeral contract or an irrevocable burial trust. If you have one, bring the account paperwork when you apply so the program can see that it is designated for that purpose.

Life insurance and how it affects your resources

Life insurance policies with a face value (the amount paid out when you die) of $1,500 or less are not counted as a resource. If your policy is worth more than $1,500, it may count, though the rules vary by state and by program. Some programs count the cash surrender value — the amount you could get if you cancelled the policy — rather than the full face value.

Term life insurance, which has no cash value and only pays out if you die during the term, typically does not count at all. Whole life or universal life policies, which build cash value over time, are more likely to be counted if they exceed the $1,500 threshold. Check with your state program about how they treat your specific policy.

Accounts held in trust for disabled or blind family members

If you have money in a trust account set up for a disabled or blind family member — such as a special needs trust or a pooled trust — that account may be excluded from your resources under certain conditions. The trust must have been created specifically for that person's benefit, and the person must be disabled or blind as defined by Social Security.

The rules for trust exclusions are complex and depend on the type of trust and your state's interpretation. If you have a trust account for a family member, bring the trust document when you apply and ask the program whether it counts. Do not assume it is excluded without asking.

What does count: cash, bank accounts, and investments

Money in your checking account, savings account, or money market account counts toward the limit. So do stocks, bonds, mutual funds, and certificates of deposit. If you own rental property or land you do not live on, that counts. A second home counts. A vehicle beyond your primary car counts.

Retirement accounts like IRAs and 401(k)s are treated differently depending on whether you are already taking withdrawals from them. If you are receiving distributions, the balance may count. If you have not started withdrawals yet, the rules vary by state. Ask your program specifically about retirement accounts in your name.

How to report your assets when you apply

When you submit information to a Medicare Savings Program, you will be asked to list your assets. Start by listing what you have: bank accounts with balances, investments, property you own. Then, as you go through the application, the program will tell you which items count and which do not.

Bring documentation: recent bank statements, property deeds, vehicle registration, insurance policies, trust documents if you have them. The program will ask for proof of the assets you report. Having the documents ready makes the process faster and reduces the chance of delays or requests for more information.

Frequently Asked Questions

Does my car count if I still owe money on it?

No. One vehicle is excluded regardless of whether you own it outright or have a loan. The program does not count the equity or the loan amount. If you own more than one vehicle, the additional ones count as resources.

What if I have money in a joint account with my adult child?

The entire balance of a joint account counts as your resource unless you can prove your child contributed to it. Even if your child's name is on the account, the program assumes you could access all of it. Bring bank statements or documentation showing your child's contributions if you want to dispute the full amount counting.

Does my pension count as an asset?

No. Pension income counts toward your income limit, not your resource limit. The same is true for Social Security, annuities, and other regular income. Only the money you have saved or invested counts as a resource.

Can I give away assets to get under the resource limit?

Giving away assets to become may be able to access for a Medicare Savings Program can create problems with other benefit programs and may trigger a penalty. Before you transfer money or property, speak with your state program about how transfers are treated. Some programs have rules about recent gifts or transfers.

What if my home is worth a lot more than the resource limit?

Your home does not count no matter what it is worth. You can own a $500,000 house and still be under the resource limit for a Medicare Savings Program. The home exclusion is unlimited.