Medicaid When a Spouse Owns a Business – Part 1

If you are a regular reader of this blog you know that in the case of a married couple where only one spouse is applying for Medicaid, the healthy spouse, known as the community spouse, is entitled to keep a certain amount of countable assets.  The assets of both spouses are evaluated for eligibility purposes.  It does not matter who owns them.  They are totaled together then divided in half and the healthy spouse can keep one half, but only up to a limit of $137,400 (the limit for 2022)

Certain other assets are exempt or non countable.  The home and one car are the most common ones.  Inaccessible assets are also not countable.  We typically see that in the case of real estate owned with another person who refuses to sell.

Income, on the other hand, is treated very differently.  Only the applicant’s income is evaluated for eligibility purposes, not the healthy spouse’s income.  Because both spouses are usually elderly and retired, the income tends to be limited to Social Security and pension.  In the past few years, however, we have had several cases in  our office in which the community spouse is still working.  Again, that does not pose a problem since the community spouse’s income – no matter the amount – is not factored into eligibility.

But, what if the community spouse is self employed?  What if that spouse owns and operates a business which is what generates the income that this spouse lives on?  Typically, such a business may own assets such as equipment, bank accounts and real estate.  How does Medicaid treat those assets?

Next we’ll I will answer these questions.