Assets Which are Excluded for the Medicare Savings Programs 510-05-60-25

(Revised 1/1/08 ML #3120)

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(N.D.A.C. Section 75-02-02.1-28.1)

 

Medically needy exempt and excluded assets are excluded for the Medicare Savings Programs with the following exceptions:

  1. Instead of the home, a residence occupied by the person, the person's spouse, or the person's dependent relative is excluded.

The residence includes all contiguous lands, including mineral interests, upon which it is located. The residence may include a mobile home suitable for use, and being used, as a principle place of residence. The residence remains excluded during temporary absence of the individual from the residence, so long as the individual intends to return. Renting or leasing part of the residence to a third party does not affect this definition. Terms used in this subsection have the following meaning:

  1. The applicant or recipient may choose either the North Dakota Medicaid burial provision or the SSI burial provision.

The SSI burial provision provides for:

  1. Burial funds of up to one thousand five hundred dollars each, plus earnings on excluded burial funds held for the individual and the individual's spouse are excluded from the date of application. Burial funds may consist of revocable burial accounts, revocable burial trusts, other revocable burial arrangements including the value of installment sales contracts for burial spaces, cash, financial accounts such as savings or checking accounts, or other financial instruments with definite cash value, such as stocks, bonds, the cash surrender value of life insurance not excluded under subsection 3a below, or certificates of deposit. The fund must be unencumbered and available for conversion to cash on very short notice.  The fund may not be commingled with nonburial-related assets and must be identified as a burial fund by title of account or by the applicant or recipient’s statement.

Example 1: Mr. Smith has two life insurance policies each having a face value of $500. Because the total combined face value is less than $1500, the life insurance is excluded as an asset, but the $1000 in face value must be applied to the burial exclusion.

Example 2: Mrs. Jones has two life insurance policies each having a face value of $1000. Because the total combined face value is more than $1500, the face value is ignored and the cash surrender value is considered as an asset which may be applied towards either the burial exclusion or the asset limit.

Example 3: Mrs. Smith has two life insurance policies each having a face value of $500. Mrs. Smith also has a $1500 burial fund. Because the total face value of the two policies is less than $1500, the life insurance is excluded as an asset, but the $1000 in face value must be applied to the burial exclusion. Only $500 of the burial fund may be excluded, and the remaining $1000 would be counted towards the asset limit.

Example 4: Mr. Jones has a life insurance policy with a face value of $1000 and an irrevocable burial with a face value of $1000. The face value of the irrevocable burial must be considered toward the $1500 burial provision leaving $500 that could still be excluded for the burial fund. The life insurance passes the $1500 face value test and is excluded as an asset, but since there is still $500 that could be excluded for burial, the life insurance must be applied. No other assets can be excluded towards the burial fund.

  1. "Burial space" means a burial plot, gravesite, crypt, or mausoleum; a casket, urn, niche, or other repository customarily and traditionally used for a deceased's bodily remains; a vault or burial container; a headstone, marker, or plaque; and prepaid arrangements for the opening and closing of the gravesite or for care and maintenance of the gravesite.
  2. "Other member of the individual's immediate family" means the individual's parents, minor or adult children, siblings, and the spouses of those persons, whether the relationship is established by birth, adoption, or marriage, except that a relationship established by marriage ends when the marriage ends.
  3. The following additional assets are excluded:
  1. Up to six thousand dollars of the equity value of nonbusiness income producing property which produces annual net income at least equal to six percent of the excluded amount is excluded. Up to six thousand dollars of the combined equity of two or more properties may be excluded, however, each property must produce at least a six percent annual return to be excluded.

The chart at 05-100-60 illustrates how the $6,000 equity/six percent annual return limits apply.

  1. Up to six thousand dollars of the equity value of nonbusiness property used to produce goods or services essential to daily activities is excluded. It is used to produce goods or services essential to daily activities, when, for instance, it is used to grow produce or livestock solely for consumption in the individual's household.
  2. To be excluded, property essential to self-support must be in current use or, if not in current use, the asset must have been in such use and there must be a reasonable expectation that the use will resume:
  1. Liquid assets are not property essential to self-support.