Countable vs Exempt Assets for Nebraska Medicaid in 2026

The $4,000 Line

Nebraska sets the countable asset limit for long-term care Medicaid at $4,000 for a single applicant. For married couples when both spouses apply, the combined limit is $8,000. Every dollar in countable assets above that threshold must be spent down before your parent qualifies.

That $4,000 is actually higher than most states — the federal baseline is $2,000, and the majority of states stick with it. But $4,000 still forces families to categorize every asset their parent owns and figure out which ones count and which ones don't.

Getting this classification wrong costs families in two ways: either they spend down assets that were already exempt (losing money unnecessarily) or they fail to address countable assets and get denied.

What Counts Against the $4,000 Limit

Cash, checking, and savings accounts. Every dollar in a bank account is countable. If any account holder can withdraw the total balance from a joint account, DHHS considers the full amount your parent's. If all account holders must sign to withdraw, DHHS counts your parent's proportionate share. If your parent verifies that none of the funds belong to them, DHHS allows 60 days to remove their name or provide proof of ownership.

Certificates of deposit. Fully countable, regardless of early-withdrawal penalties.

Stocks, bonds, and mutual funds. All investment accounts are countable at current market value.

IRAs and retirement accounts. This catches families off guard. In Nebraska, IRAs — both traditional and Roth — are countable assets for Medicaid eligibility. It doesn't matter whether your parent is taking required minimum distributions. The full account value counts. Some states exempt IRAs that are in payout status, but Nebraska is not one of them. If your parent has a $50,000 IRA, that's $50,000 against the $4,000 limit.

Cash value life insurance. Here's where the rule gets specific: Nebraska looks at the total face value of all life insurance policies on the applicant's life. If the combined face value is $1,500 or less, the policies are completely exempt. If it exceeds $1,500 — even by a dollar — the entire cash surrender value of all policies becomes countable. A whole life policy with $25,000 face value and $8,000 in cash surrender value adds $8,000 to your parent's countable assets.

Real property other than the primary home. Vacant land, rental properties, and second homes are countable at fair market value.

Annuities. Unless they meet specific Medicaid-compliant requirements (irrevocable, non-assignable, actuarially sound, with Nebraska named as remainder beneficiary), annuities are countable.

What's Exempt

The primary residence. Your parent's home is exempt if any of these conditions are met: (1) a spouse still lives there, (2) a child under 21 lives there, (3) a blind or disabled child of any age lives there, or (4) your parent has documented "intent to return" and the home equity interest doesn't exceed $752,000. The intent-to-return documentation matters even if your parent is unlikely to go home — it preserves the exemption during the Medicaid application process.

One automobile. One personal vehicle is fully exempt regardless of value, as long as it's used for transporting the applicant or a household member.

Household goods and personal effects. Furniture, appliances, clothing, and jewelry are non-countable.

Irrevocable burial trusts. Funds placed in an irrevocable burial trust are exempt up to $6,696 (effective September 1, 2025, adjusted annually by CPI). Separate from this cap, burial space items — casket, vault, headstone, plot, and grave opening/closing services — are fully exempt with no dollar limit. This creates two distinct buckets: the trust covers professional services (embalming, facility fees, hearse), while the space items are purchased separately and exempt without a cap.

Term life insurance. Policies with no cash surrender value aren't resources.

The IRA Problem and What to Do About It

IRAs are the most common surprise in Nebraska Medicaid planning. Families assume retirement accounts are protected — they're not.

If your parent has a significant IRA balance, your options depend on timing. During the spend-down phase, IRA funds can be used for allowable expenses: paying off the mortgage, funding the irrevocable burial trust, making home modifications (wheelchair ramps, walk-in showers), paying medical bills, or purchasing a Medicaid-compliant annuity.

The key is spending IRA funds on exempt categories before applying. Withdrawals create taxable income, but that income flows through the medically needy spend-down once your parent is on Medicaid — Nebraska doesn't use it as a barrier to eligibility. The tax hit is real, but it's manageable compared to losing the entire account balance.

For married couples, the community spouse's IRA is also assessed during the resource snapshot, but the Community Spouse Resource Allowance (CSRA) protects a portion. The community spouse keeps 50% of joint countable assets, bounded by a floor of $32,532 and a ceiling of $162,660.

The Life Insurance Decision

If the combined face value of your parent's life insurance exceeds $1,500, you have a choice: reduce the face value to $1,500 or less (making it exempt), or convert the policy to a countable asset and spend down the cash value.

For small whole life policies, surrendering the policy and using the cash for allowable spend-down expenses is often the cleaner path. For larger policies, some families reduce coverage through partial surrender to get under the $1,500 threshold — though this only works if the remaining cash value is minimal.

Don't cancel policies impulsively. A $10,000 whole life policy with $3,000 in cash value adds $3,000 to countable assets, but surrendering it produces $3,000 in cash that still needs to be spent down. The spend-down strategy matters more than the classification.

Putting It Together

The Nebraska Medicaid Long-Term Care & Asset Protection Guide includes a countable-vs-exempt asset worksheet and a spend-down planner built around Nebraska's specific rules. It walks through how to categorize every common asset type, convert countable resources into exempt ones legally, and document the process so your parent's application doesn't get flagged during the DHHS review.

See more Nebraska guides →