The question is, does buying a car affect Medicaid?
Yes, buying a car while on Medicaid will affect your Medicaid because you would be questioned on how you get the money to buy the car. Since you shouldn’t have more than $2,000 to qualify for Medicaid, you can’t buy a car while on Medicaid to avoid losing your Medicaid coverage.
Medicaid is a healthcare program that is provided and financed by the federal and state government of the United States. It is known by different names in different states like DelaniCare in Alaska, Medi-Cal in California, and so on.
It is a program for those who don’t earn much income or are below the income limit rate given by the state government.
The eligibility criteria for Medicaid differ from state to state. So you have to be familiar with Medicaid in your state. But generally, it is granted to those that don’t have much income.
Medicaid doesn’t pass from State to state. If you are moving to a new state, you have to apply again for Medicaid when getting there. And it’s really not an easy process.
Medicaid Qualification and Application
While applying for Medicaid, certain assets you own will have to be spent down. These are your countable assets: your savings, stocks, bonds, etc. You can’t have more than $2,000 in your account but this amount also differs from state to state.
Even your income will be monitored for the last five years. Different transactions you made and how much they were will be brought to the limelight. If these transactions are taken seriously before you are accepted then your transactions will be monitored while you are on Medicaid.
You can’t transfer a huge amount of money above the income limit because it will make you ineligible. You might be thinking of spending your money to buy certain things like cars while on Medicaid. This will raise the question: Does buying a new car affect Medicaid?
Can I Buy a Car While on Medicaid?
Cars are included under uncountable assets in the Medicaid process. When you want to apply for Medicaid, your car is exempted because it’s a necessity. You are only allowed to keep just one car.
Also, when it comes to Medicaid, different states have their exceptions. In some states, you can keep cars that are older than 7 years old apart from the main car exempted. In other states like New York, you can have a second car for medical transportation.
The price of the car doesn’t even matter even if it’s above $100,000, it won’t be taken away from you, as long as you have it before applying for Medicaid. However, since you have a car already, you can’t buy a car while on Medicaid. This means you are earning more than you claim you earn.
But if you don’t have a car as at the time you were approved for Medicaid, you can get a car. But there are ways to go about this so that you won’t violate the rules of Medicaid in your state. A Medicaid expert will see you through this. Also, be familiar with the rules in your state asides from the general rule.
If you need the car for medical or employment-related purposes in certain states, notify Medicaid of the money you get. This question is just like asking if one can buy a new house while on Medicaid.
Does Buying a New Car Affect Medicaid?
Buying a new car besides the exempted one will affect Medicaid. You will be asked how you got the money to get the car since the amount in your account shouldn’t be more than $2000 (except in states that have their permanent figure). You can only get a new car if it’s needed and you don’t have one.
Pros of Buying a New Car While on Medicaid
Transportation purpose
A car is necessary especially in this age where we need to be time conscious and punctual to different places. Buying a car while on Medicaid when you don’t have one yet won’t be stopped, rather it will be easy because a car is part of your uncountable assets. Also, you will be able to transport yourself or your spouse to the hospital or make use of it for employment purpose
Variety
In states that allow more than one vehicle for medical or employment-related purposes, buying a new car will bring variety. You wouldn’t have to rely on just one car. Using just one car all the time can quicken its faults
Cons of Buying a New Car While on Medicaid
Loss of Medicaid
Your Medicaid coverage will be stopped when you buy a new car. You can’t have more than one car while on Medicaid except in cases where the car is older than 7 years old and in states that have specific exemptions on cars. But if you have picked your exempted car already, getting a new one will bring a penalty if your state does not allow that.
Can Medicaid Take Your Car?
No, Medicaid cannot take your car as long as you did not sign up for Medicaid Assistance Estate Recovery. The only way Medicaid can take your car is if you sign up for the Medicaid Assistance Estate Recovery which gives them the power to take your exempted assets (car) after you die.
This is a common question people ask because of information they’ve gotten from people. Part of the requirements for being eligible for Medicaid is that you have just one car. You can’t have more than one usable car.
If you have many cars, you are to pick one (the price might be the highest among your cars). After picking it, you are to spend down the assets. It is better you sell the cars and pay any debt on them. Even unusable cars must be spent down.
During the Medicaid process, carry a Medicaid expert or elder law attorney along so that you won’t sign up for Medicaid Assistance Estate Recovery. This process states that once the applicant dies, the exempted assets are taken by Medicaid once you sign up for it. So, Medicaid can take your car when you pass on.
What Type of Car Should I Buy While on Medicaid?
If it’s not your only car, you can buy any kind of car. In some states that allow more than one car like New York, you can get another car but it will be on the basis of medical needs or for employment-related activities or Plans for Achieving Self-Support. Anything except for this will count the new cars as countable assets.
When to Buy Car While on Medicaid
You have to sit with a Medicaid expert to help you decide on that so that you won’t violate the rules of Medicaid. You can’t just decide to buy a car any time you want.
Don’t forget that Medicaid eyes are always on you. If even if you buy the car and hide it, they will definitely find out. The same goes for buying a house. If you buy a new house while on Medicaid, they will know.
When Not to Buy Car While on Medicaid
You have to be familiar with Medicaid in your state to know when not to buy a car while on Medicaid. If you violate the rules of Medicaid, your car will be counted as a countable asset. Your Medicaid coverage will be stopped because it shows you can pay for your healthcare cost yourself and you can be charged for fraud.
Final Thoughts
Medicaid can be tricky if you are ignorant of the rules of your state. Medicaid doesn’t transfer from state to state so you have to go to the Medicaid office or check your state’s website to be familiar with the requirements for Medicaid. You need to also have an expert with you to guide you through the process. And you don’t need to buy a car while on Medicaid if you are not very familiar with the rules to avoid getting yourself into serious trouble.
