Medically challenged people who are physically disabled or low-income earners seek Medicaid when they decide that they cannot take care of themselves anymore, especially if they have little to no money for health care that will maintain their lives.
Medicaid is a program that was created by the federal government, in collaboration with state governments to provide proper healthcare, reducing and subsidizing the cost of healthcare for medically challenged people who have limited income resources and cannot afford private healthcare of their own.
The benefits provided by Medicaid and that are peculiar to the program are personal care services, nursing home care, standby personal services, etc.
The program provides for all, or at least, most of the medical needs of the applicant, while the applicant pays whatever is remaining, and usually, they are unable to pay with cash as many applicants are either not active income earners, or their income can’t keep up with the rest of the fees.
As a result, they end up owing the state some amount of money when they die, which makes the state take over whatever properties they have after their death when they do not have an eligible relative to assume ownership of their estate.
Since this is the case, the policies of the program ensure that non-countable assets should remain in the ownership of the applicant while on Medicaid.
Non-countable assets are things like a primary home, prepaid funeral and burial arrangements, personal effects, only one car, an amount of cash not exceeding two thousand dollars ($2,000) for an individual, and three thousand dollars ($3,000) for a couple, etc.
Can I Sell My Car While on Medicaid?
Yes, selling your car while on Medicaid does not affect your program, therefore you can sell your car while on Medicaid
However, it is best to leave your car in your possession and not sell it while you are applying for Medicaid benefits.
This is because one primary car is a non-countable item, that is, an item that cannot be converted into cash to recoup debts owed by the applicant after the applicant’s death. After you have secured your Medicaid benefits, you can then decide to sell your car or not.
Also, the answer can still be no. If you have more than one car, you can sell the rest, excluding one, as the number of cars you have after the first and primary one is considered a countable asset under the policies of the Medicaid program.
How Many Cars Can You Own While on Medicaid?
As a Medicaid recipient, you are allowed to have only one car.
One car, according to the policies of the program is a non-countable asset that will not be taken into the account of Medicaid while taking stock of your countable assets.
Every other number minus the one non-countable asset is regarded as a countable asset and will be taken into account to sell off and pay any healthcare debt that you might be owing after your death.
No matter the number of cars you own, you are only allowed one car, while the rest is accounted for as countable items.
How to Sell My Car While on Medicaid
People who sell their car while on Medicaid do so without the knowledge of Medicaid.
After applying for Medicaid benefits, they go behind to sell off their car, or transfer possession of the car to someone else secretly, and although, this poses various problems as Medicaid always has a way of finding out the transactions, getting the documentation, etc.
The best way to sell your car while on Medicaid is to do it secretly, and devise ways to ensure that Medicaid doesn’t find out.
However, the odds are that Medicaid will find out, one way or the other, and when they do, they would withdraw all your Medicaid benefits and might cause further penalties to be imposed on you.
Moreover, does buying a brand new car affect the Medicaid program?
Pros of Selling My Car While on Medicaid
1. More Medicaid Benefits
Selling your car discreetly while on Medicaid will potentially increase the benefits you receive from Medicaid, and if the transaction, that is, the sale of the car is hidden well from Medicaid, you will continue to get all the benefits accrued to you up until you become unqualified to receive Medicaid benefits.
2. Protection of Asset
You can protect your sold car from Medicaid who will sell the car off for their benefit after the death of the recipient. To protect the proceeds of the car, you should open an Asset protect trust.
The asset trust is used to protect your asset from falling into the wrong hands, wherein in this case, the wrong hand is the Medicaid who you are trying to protect your assets from after death.
3. Cash Benefits
Selling a car brings in cash benefits that you otherwise would not have received. However, as a result of the limit to the amount of money a person on Medicaid can have, you should find a way to keep the proceeds from the sales of your car away from the hands of Medicaid.
Cons of Selling My Car While on Medicaid
Withdrawn Benefits from Medicaid
Medicaid is bound to find out that you have sold your car without their knowledge, and when they eventually find out, they would withdraw all Medicaid benefits that you were enjoying while in the program and kick you out of it. At this point, you might have to rely on the proceeds of your car.
Penalty for Breaking Policies
Beyond kicking you out of the program, Medicaid can go ahead to penalize you legally as it is clearly stated in their policy that if any recipient breaks any of the rules or policies, Medicaid reserves the right to penalize such a recipient.
Can I Lease My Car While on Medicaid?
Yes, you can. This is because cars that have been leased have no bearing on your Medicaid benefits. Medicaid isn’t interested in how you spend your money or how you make your little money while on their program.
As a Medicaid recipient, it is better to abide by the policies of Medicaid which states that you can keep only one car as a non-countable asset, irrespective of the number of cars that you have before applying for Medicaid.
If you have more than one car, you have to sell off the rest at the fair value or market price at the time of sale, and also, to be eligible for Medicaid, you must provide the relevant documents that states that you have sold the other cars at fair value.
If you sold at an amount lesser than its fair value, there must be proper documentation as to why such an anomaly has occurred before you can be eligible to receive Medicaid benefits.
In light of this, if you have more than one car, you can sell everything, apart from one, on Medicaid, but if you have only one car while on Medicaid, then the answer is no, you cannot sell your car while on Medicaid.