Elder Law & Medicaid Planning
Medicaid Countable vs. Exempt Assets: What They Count
Last updated July 2026
6 min read
✓ Verified Jul. 2026When you apply for Pennsylvania Medicaid to pay for nursing home care, the state counts your assets to determine eligibility. Some are "countable" (they disqualify you). Others are "exempt" (they do not count). Which category an asset falls into can mean the difference between qualifying for benefits and facing a years-long eligibility delay. Here are the rules under 55 Pa. Code § 178.
The default is that everything counts. An asset is only excluded if a rule in 55 Pa. Code Chapter 178 says so, and resources are measured at equity value unless a rule says otherwise.
General guidance only, not legal advice. Dollar figures move every year, and the resource limit itself is not in the regulation: § 178.1(a) points to Appendix A, with revisions published in the Pennsylvania Bulletin. Exclusions turn on facts an application will test, including intent to return home, whose name is on what, and how a burial reserve is written. Verify current figures and talk to a lawyer before acting.
Core Rule (55 Pa. Code § 178.1)
You are resource eligible for Medicaid if your total countable resources do not exceed the limit . Pennsylvania uses a two-tier resource limit for a single applicant. If the applicant's gross monthly income is at or below 300% of the federal benefit rate, the resource limit is $8,000. If gross monthly income is above 300% of the federal benefit rate, the resource limit is $2,400. Most long-term-care applicants fall under the $8,000 limit, which is the figure used throughout this page. Exempt assets are not counted toward this limit, no matter how much you have.
Your principal residence is exempt, even if it has significant equity. Under 55 Pa. Code § 178.62, your primary home is excluded as a resource so long as you, your spouse, or a dependent relative live there, or, if you are institutionalized, you state in writing that you intend to return home . The home is excluded regardless of its value while that condition is met. Separately, under 55 Pa. Code § 178.62a a person whose home equity exceeds $752,000 (2026 limit) is ineligible for payment of long-term care services, unless the home is the residence of the community spouse or of a child who is under 21 or blind or permanently and totally disabled.
The home becomes countable immediately after the resident's death unless estate recovery exemptions apply (see our page on estate recovery ).
You can own one motor vehicle of any value without it counting as a resource (55 Pa. Code § 178.67), whether the vehicle is paid off or financed. Only one vehicle per applicant is exempt; a second or third car would be countable.
Clothing, jewelry, household goods, furniture, and personal effects are exempt (55 Pa. Code § 178.66). There is no dollar limit; these items do not count no matter how valuable. Antiques, artwork, and valuable collections are exempt as long as they are for personal use, not held as investments.
A burial space (grave, mausoleum, crypt, or urn) for the applicant and immediate family is exempt (55 Pa. Code § 178.71). An irrevocable burial reserve is not a countable resource (55 Pa. Code §§ 178.72 and 178.5); there is no flat dollar cap, but the reserve must not be exorbitant in relation to average local burial costs (it is presumed reasonable if it does not exceed average local costs by more than 25%). An irrevocable burial reserve must be deposited with a financial institution or funeral director under a written agreement and cannot be withdrawn before death. A revocable burial reserve is excluded up to $1,500 per applicant (55 Pa. Code § 178.73), reduced by the value of any cash-value life insurance and any irrevocable burial reserve.
Whole life or universal life insurance with a face value under $1,500 is exempt (55 Pa. Code § 178.69). If the face value exceeds $1,500, the cash surrender value in excess of $1,000 becomes a countable resource. For example, if you own a policy with a face value of $10,000 and a cash value of $5,000, only $4,000 ($5,000 minus the $1,000 disregard) counts against you.
Term life insurance that does not build cash value is always exempt, regardless of face value (55 Pa. Code § 178.70).
This area is nuanced and often misunderstood. IRAs and other retirement accounts are not automatically exempt. However, an annuity that meets Deficit Reduction Act (DRA) requirements may be protected. A DRA-compliant annuity must be irrevocable, non-assignable, actuarially sound, and pay the annuitant (the applicant or community spouse) a stream of equal periodic payments. It must also name the state Medicaid agency as the remainder (death) beneficiary, up to the amount of benefits paid, in first position (or in second position after a community spouse or a minor or disabled child). Improperly structured annuities become countable resources.
If you are considering an annuity as part of Medicaid planning, consult with an attorney before purchase, one wrong decision can cost tens of thousands in eligibility loss.
Cash, checking accounts, savings accounts, money market accounts, stocks, bonds, and mutual funds are all fully countable (55 Pa. Code § 178.4). The entire balance counts regardless of whether funds are earmarked for other purposes. If you have $50,000 in savings and the limit is $8,000, you are over the limit by $42,000.
Vacation homes, rental properties, land held as investment, and any real estate not occupied by a protected family member are countable (55 Pa. Code § 178.2 defines "equity value" as fair market value less encumbrances). A beach house with $200,000 in equity counts fully toward your $8,000 limit.
Once you receive a distribution from an IRA, 401(k), or pension, it becomes cash and is countable (55 Pa. Code § 178.4). Taking regular distributions to "spend down" assets is a common (though inefficient) Medicaid strategy; see our guide on the 5-year lookback period .
When one spouse is in a nursing home and the other is at home (the "community spouse"), Pennsylvania law protects the at-home spouse's assets. Under 55 Pa. Code § 178.121 to 178.123, the community spouse can retain 50% of the couple's combined resources, up to a maximum of $162,660 (2026) . If 50% is less than the minimum, the at-home spouse can keep up to $32,532 (2026) instead.
Example: A couple has $200,000 in countable assets. The nursing home resident's "share" for Medicaid purposes is $100,000 (50% of $200,000), but 50% does not exceed the maximum of $162,660, so the community spouse can keep the full 50%. The institutionalized spouse must spend down their $100,000 share to their individual resource limit (for example, $8,000), not to zero, before Medicaid pays.
The CSRA is crucial in married-couple scenarios and often overlooked. Understand it early in your planning.
When you apply for Medicaid (55 Pa. Code § 178.3), you must report all resources and provide verification: bank statements, deeds, insurance policies, IRA statements, and more. The county assistance office will:
Verification is critical. Missing a statement or failing to report an asset can trigger a denial or, later, recovery of overpaid benefits.
If you have countable resources above the limit, you must dispose of them under the "fair consideration" rules (55 Pa. Code §§ 178.1(c) and 178.104). Fair consideration means you received approximately equal value in return. Selling a house for fair market value, paying off debts, or spending down cash on medical expenses all meet fair consideration. Gifting assets does not; gifts trigger a penalty period under the 5-year lookback rule .
Trust treatment is complex. If a trust is revocable by the applicant, its contents are countable (55 Pa. Code § 178.7). If the trust is irrevocable and the applicant cannot access principal, different rules apply, but those rules depend on when the trust was created, its specific language, and other factors. This is where a Medicaid attorney earns their fee.
Statutory content on this page was last verified against Pennsylvania statutes (20 Pa.C.S.; 72 P.S. Art. XXI): Jul. 2026. If you are reading this significantly after that date, confirm key provisions with current statute text or contact our office.
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