Kentucky Medicare Savings Program Resource Limits: What Counts and What's Excluded

The 2026 Resource Limits

Kentucky maintains the federal resource baseline for all Medicare Savings Program tiers. For 2026, those limits are:

• Individual: $9,950
• Couple: $14,910

These apply to QMB, SLMB, and QI. QDWI uses separate, lower limits ($4,000 individual / $6,000 couple). DCBS evaluates your resources as of the first moment of the first day of each calendar month — a snapshot, not an average.

What Doesn't Count

The exclusion list under 907 KAR 20:025 is longer than most people realize, and it's where the resource test becomes manageable for most Kentucky seniors:

Your home. The primary residence is fully excluded regardless of value, as long as the applicant lives there or intends to return. No equity cap applies — the $730,000 home equity limit is an institutional Medicaid rule, not an MSP rule. A home worth $400,000 doesn't affect MSP eligibility.

One car. The primary vehicle used for transportation is excluded regardless of market value.

Household goods and personal items. Furniture, clothing, appliances — all excluded.

Burial reserves. Burial plots, vaults, and spaces for the applicant and immediate family are excluded without dollar limits. A designated burial fund of up to $1,500 per person (in a separate account, revocable trust, or life insurance policy) is also excluded. Prepaid, irrevocable funeral contracts are excluded entirely with no dollar cap.

Certain annuities. An annuity that is irrevocable, non-assignable, and cannot be sold on the secondary market is excluded as a resource. However, the monthly payments it generates count as unearned income.

What DCBS Counts

Everything else that can be converted to cash falls into the countable column:

• Bank accounts — checking, savings, CDs, money market funds
• Investment accounts — stocks, mutual funds, savings bonds
• Life insurance cash value — if the total face value of all policies exceeds $1,500, the cumulative cash surrender value counts
• Retirement accounts — IRAs, 401(k)s, 403(b) balances, unless converted into an irrevocable periodic payout stream
• Jointly held accounts — a bank account shared with an adult child is presumed to belong entirely to the MSP applicant. The child can rebut this by documenting that they deposited their own independent funds.

That last point catches families off guard. If an adult daughter added her mother to a joint checking account for convenience, the full balance may be attributed to the mother for MSP purposes unless the daughter provides bank statements showing her own deposits.

MSP vs. Full Medicaid Resource Rules

People often confuse MSP resource rules with Medicaid's broader resource framework. The key differences:

MSP is simpler. There are no spousal impoverishment protections (Community Spouse Resource Allowance) because MSPs don't involve institutional care. Both spouses' combined resources are measured against the couple limit.

Transfers. DCBS evaluates countable resources on the first day of each month. Before transferring assets, ask DCBS or a Kentucky legal aid provider how the transfer may affect eligibility.

MSP has no estate recovery. Under 42 U.S.C. § 1396p(b)(1)(B)(ii), Kentucky cannot recover MSP costs from a beneficiary's estate.

Timing the Application Around Resources

Since DCBS checks resources on the first of the month, a bank balance that spikes mid-month (a one-time insurance payout, a tax refund) doesn't disqualify you if it's spent down by the first of the following month. This isn't gaming the system — it's how the federal snapshot rule works.

If your parent is close to the limit, review what's countable versus excluded. Designating a burial fund, prepaying an irrevocable funeral contract, or documenting a jointly held account's true ownership can bring countable resources under the threshold legitimately.

The Kentucky Medicare Savings Programs & Extra Help Guide walks through the resource calculation with a checklist of countable and excluded assets specific to Kentucky's administration.

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