New Mexico Medicaid Exempt Vehicle and Household Goods

The $2,000 Limit and What It Doesn't Count

New Mexico Medicaid long-term care requires countable assets of $2,000 or less for a single applicant. But "countable" doesn't mean everything the person owns. Federal and state Medicaid rules exempt entire categories of property from the resource calculation. Understanding which assets are exempt is the difference between thinking your parent has too much to qualify and realizing they may already be close to the threshold.

Vehicles

One vehicle is completely exempt regardless of its value. Whether it's a 2008 Camry worth $3,000 or a 2024 truck worth $45,000, the primary vehicle is excluded from countable resources.

If the applicant owns a second vehicle, its equity value is countable. For married couples where one spouse is applying and the other remains in the community, the community spouse's vehicle is also excluded from the applicant's resource count under spousal impoverishment protections.

As a spend-down strategy, upgrading an older vehicle to a newer one converts countable cash into an exempt asset. A parent with $12,000 in countable savings who uses $10,000 to buy a more reliable car reduces their countable assets by $10,000 while retaining practical transportation value.

Household Goods and Personal Effects

Household furniture, appliances, clothing, and personal effects are fully exempt. The Income Support Division does not inventory the contents of your parent's home and assign them a value. A house full of furniture, a television, kitchen appliances, bedding, and clothing has zero impact on countable resources.

This exemption also covers items of personal significance — jewelry of reasonable value, family photographs, books, and similar possessions. However, collections of exceptional value (rare coin collections, fine art portfolios) may be scrutinized if they could reasonably be liquidated for significant cash.

Other Key Exemptions

Beyond vehicles and household goods, the following are also excluded from the $2,000 countable asset limit:

• The primary residence — exempt up to $752,000 in equity for a single applicant (2026), or unlimited if a spouse, minor child under 21, or blind/disabled child lives there. The applicant must reside in the home or sign a statement of intent to return.
• One prepaid, irrevocable funeral contract — exempt at any value when properly structured as irrevocable. A revocable burial fund is only exempt up to $1,500 and must be held in a separate designated account.
• Term life insurance policies — policies with no cash surrender value are excluded. Whole life or universal life policies with a cash surrender value are countable.
• Property essential for self-support — tools and equipment used in a trade or business, though this exemption rarely applies to nursing home applicants.

What Catches Families Off Guard

Retirement accounts are countable. In New Mexico, IRAs and 401(k) plans are fully countable resources — even if the owner is taking required minimum distributions. This is a major trap for families who assume retirement accounts are treated like exempt assets. A $50,000 IRA pushes countable resources far above the $2,000 limit and must be addressed through a structured spend-down before the application.

Cash value life insurance is countable. The face value of a whole life policy doesn't matter — the ISD looks at the cash surrender value, which is the amount the policyholder would receive if they canceled the policy.

Bank accounts with a child's name on them. If a parent added an adult child to their bank account for convenience (so the child could pay bills), the full balance is presumed to be the parent's resource unless the child can document that they contributed their own funds.

Documenting Exempt Status

The ISD will review vehicle titles, property deeds, and insurance policies as part of the Medicaid application. Having these documents organized and labeled before filing — with clear proof that there is only one vehicle, that the home equity is within limits, and that funeral arrangements are irrevocable — prevents requests for additional information that delay the 45-day processing timeline.

The New Mexico Medicaid Long-Term Care & Asset Protection Guide includes an asset classification worksheet that walks through every category — countable and exempt — so families can calculate their true countable resource total before filing.

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