Montana Medicaid Countable vs Exempt Assets: What You Can Keep

The $2,000 Threshold

Montana Medicaid long-term care eligibility requires a single applicant's countable assets to be at or below $2,000. For a married couple where both apply, the combined limit is $4,000. When only one spouse applies, spousal impoverishment protections allow the community spouse to retain up to $162,660 through the Community Spouse Resource Allowance (CSRA).

The $2,000 figure is what trips most families up. The number sounds impossibly low until you understand which assets are countable and which are exempt. The distinction is often the difference between qualifying and being denied.

What Counts Against the $2,000 Limit

Cash and bank accounts. Checking accounts, savings accounts, money market accounts, and certificates of deposit are all countable at their current balance.

Investments. Stocks, bonds, mutual funds, brokerage accounts, and treasury bills are countable at current market value.

Retirement accounts. Traditional IRAs and 401(k) accounts belonging to the applicant are generally countable. The treatment of a community spouse's retirement accounts varies — in some cases, DPHHS counts them; in others, the spouse's retirement assets are excluded. This is one area where Montana-specific advice matters.

Additional real estate. Any property beyond the primary residence — vacation homes, rental properties, undeveloped land — is countable at market value.

Additional vehicles. One vehicle is exempt (see below), but any additional vehicles count at fair market value.

Life insurance with cash value. Whole life, universal life, and other policies with cash surrender value may be countable. Term life policies have no cash value and do not count.

Revocable trusts. Assets held in a revocable trust remain countable because the applicant retains control over them.

What Does Not Count

The primary home. The applicant's home is exempt from the asset test if the applicant intends to return home or if a spouse, a child under 21, or a blind or disabled child resides there. For single applicants, the home equity interest must be below $752,000. If a spouse lives in the home, there is no equity cap.

One vehicle. One automobile is fully exempt regardless of value if it is used for transportation of the applicant or a household member.

Personal belongings and household goods. Furniture, clothing, appliances, and personal effects are exempt without a value cap.

Irrevocable prepaid burial plan. An irrevocable prepaid funeral arrangement is fully exempt. Do not assume that a separate burial fund receives the same treatment without confirming it with DPHHS.

Term life insurance. Policies without cash surrender value do not count, regardless of face value.

Property essential for self-support. Business equipment, tools, or property used to generate income can be partially or fully exempt.

Tribal trust land and income. For Native American families, land held in tribal trust and income derived from it are completely exempt from Medicaid asset calculations and estate recovery.

The Assets That Cause Problems

Several asset categories create confusion because their treatment depends on specific details:

IRAs in payout status. Retirement-account treatment can depend on how the account is structured and whether distributions are being made. Confirm the treatment with DPHHS before classifying the account.

Life estates. If the applicant transferred property but retained a life estate (the right to live there), the value of the life estate may be countable. Life estates are also subject to the lookback analysis if created within 60 months of the application.

Joint accounts. When an applicant's name is on a joint bank account, DPHHS will review ownership and each person's contribution. Adding a child to a bank account "for convenience" can create both an eligibility issue and a lookback transfer question.

Inherited assets during eligibility. If a Medicaid recipient inherits money or property while receiving benefits, report it to DPHHS promptly. Its treatment can affect eligibility, so do not assume it can simply be spent down within a fixed period.

Converting Countable Assets to Exempt Assets

The process of reducing countable assets to $2,000 does not require giving money away (which triggers lookback penalties). It requires converting liquid assets into exempt categories:

• Pay off the home mortgage — the home remains exempt and the cash is gone
• Make necessary home modifications (wheelchair ramps, grab bars, accessible bathroom renovations) that improve safety
• Purchase an irrevocable prepaid burial plan for the applicant and spouse
• Repair or replace the exempt vehicle
• Pay outstanding medical bills, dental work, or purchase hearing aids and eyeglasses
• Prepay Medicare and supplemental insurance premiums

These transactions generally involve fair value or an exempt category; keep receipts and records, and confirm any transaction with DPHHS before relying on it.

For a structured worksheet that classifies every asset category and calculates the gap between current countable assets and the $2,000 limit, the Montana Medicaid Long-Term Care & Asset Protection Guide includes a financial snapshot tool designed for Montana's specific rules.

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