I recently had a conversation with a case manager at the Department of Children and Families (DCF) regarding the ownership of automobiles and how they are treated for Medicaid eligibility purposes. We know that an applicant is allowed to own one car, and it is considered an exempt asset. But what happens if he owns two?
According to DCF regulations, the automobile with the highest equity value may be the one vehicle that is completely excluded as an asset, so Medicaid would count the vehicle with the lower value as an asset.
I remembered reading somewhere that any vehicle older than seven years also is an excluded asset, even if it constituted a second automobile. So, I assumed that our client’s second automobile was not included as an asset. To my surprise, I was completely wrong!
During my conversation with the case manager, she explained that there are instances where a second car could be counted as an asset. This includes: luxury cars (for instance, a Lincoln, Corvette, Jaguar, Mercedes and Cadillac); vehicles that are over 25 years old (as they are considered classics or possibly antiques); or any kind of customized vehicle, with the exception of any vehicle that is modified for a handicapped individual.
My client’s oldest automobile happened to be a 1999 black Corvette! His other automobile was a 2014 Honda Civic. According to Kelly Blue Book, the Corvette is worth approximately $12,000, whereas the Honda Civic is worth approximately $7,900.
So, what does this mean for our client, the Medicaid applicant? Back to our original example … if our client had a mint-condition, 1999 black Corvette and a 2014 “plain Jane” Honda Civic, the sweet ‘Vette would be the one vehicle we would choose to be excluded for Medicaid, leaving the Civic to be counted toward his assets.
The Civic’s $7,900 fair market value exceeded the $2,000 resource allowance, so he would not qualify for Medicaid. We had to determine if there was a way he could qualify for Medicaid under these circumstances. Because he was married, we were able to recommend that he transfer the Civic to his spouse. Under Florida law, transfers between spouses can occur without a penalty, as transfers between spouses are exempt from the transfer penalty rules. This way, both cars could stay in the family and not be counted as assets for Medicaid purposes.
If you have any questions about this, or any Medicaid planning, please contact us or call us at (561) 750-3850. Stay tuned for more information and updates about Medicaid and Veterans Benefits Administration in upcoming issues.