Joint Bank Accounts with a Medicaid Applicant & the Impact on Eligibility for Long Term Care

Money held in joint bank accounts might make a senior ineligible for Medicaid Long Term Care, even if some of that money doesn’t belong to them. The way joint bank accounts are titled can also impact Medicaid eligibility. When a senior shares a bank account with their spouse the rules are straightforward, but things get more complicated when they share an account with anyone else, including adult children and other relatives.


Jointly Owned Bank Accounts & Medicaid Eligibility

To be eligible for Medicaid Long Term Care, seniors have to meet medical requirements and two financial requirements – an asset limit and an income limit. Not all assets count toward the asset limit, but money in bank accounts will count. While asset limits varies by state, type of Medicaid Long Term Care and marital status, in general they are very low. For example, for many programs in many states, the 2024 individual asset limit for Medicaid Long Term Care is $2,000. This means applicants must have $2,000 or less in countable assets to be eligible. There is a notable exception – California has no asset limits for Medicaid Long Term Care as of Jan. 1, 2024.

When it comes to joint bank accounts co-owned by Medicaid applicants, Medicaid will assume all of the funds in the account belong to the applicant unless there is indisputable proof that it does not. Indisputable proof would include deposit slips, withdrawal slips and other documents that show the money belongs to the non-applicant co-owner of the joint account. For example, a Medicaid applicant has a joint account with her adult daughter that has $20,000 in it. The adult daughter has kept good records and has indisputable proof that $19,000 of the money is hers, so only $1,000 from that joint bank account would count toward the applicant’s asset limit.

Joint Bank Accounts with a Spouse

Medicaid considers all assets owned by either spouse in a married couple to belong to both spouses, so joint bank accounts don’t make a difference when it comes to married couples applying for Medicaid. A bank account held by one spouse will count toward the asset limit of the other spouse just like a joint account held by both spouses would. However, when it comes to married couples with just one spouse applying for Medicaid Long Term Care, there are rules that allow some non-applicant spouses to keep assets well above the asset limit. These rules depend on the type of Medicaid Long Term Care program, which we’ll get into next.

Joint Bank Accounts and the 3 Types of Medicaid Long Term Care

There are three types of Medicaid Long Term Care relevant to seniors – Nursing Home Medicaid, Home and Community Based Services (HCBS) Waivers and Aged, Blind and Disabled (ABD) Medicaid.

Nursing Home Medicaid will pay for long-term care in a nursing home for financially limited seniors who require a Nursing Facility Level of Care. HCBS Waivers will pay for long-term care benefits that will help financially limited seniors who need a Nursing Facility Level of Care remain living in the community instead of moving to a nursing home. ABD Medicaid will cover long-term care benefits in the community for eligible seniors who show a medical need for those benefits.

All three have asset limits, so joint bank accounts can impact eligibility when it comes to all three programs. However, there are some rules that can impact asset limits that don’t apply to all three programs.

For married couples with just one spouse applying for either Nursing Home Medicaid or HCBS Waivers, some non-applicant spouses are allowed to keep up to $154,140 in assets (as of 2024) without impacting the applicant spouse’s eligibility. This is known as the Community Spouse Resource Allowance, and it does not apply to ABD Medicaid. So, a married couple with just one spouse applying for Nursing Home Medicaid or HCBS Waivers could have a joint bank account with more than $150,000 in it and the applicant spouse could still be eligible for either program. Plus, the non-applicant spouse would be able to use that money to avoid living in poverty, which is the purpose of the Community Spouse Resource Allowance.

It’s also important to know about Medicaid’s Look-Back Period when discussing asset limits and joint bank accounts, so we’ll dig into that in the next section.


Medicaid's Look-Back Period and Joint Bank Accounts

To make sure applicants don’t simply give away their assets, Medicaid uses the Look-Back Period. In most states, the Look-Back Period is 60 months (five years). This means the state will look back into an applicant’s financial history for the 60 months prior to the day they submit their Medicaid application to make sure they haven’t given away any assets or sold them at less than fair market value.

So, a senior couldn’t simply give away their joint bank funds to the co-owner of the account, or to anyone else, without violating the Look-Back Period. That’s also why the non-applicant co-owner of the account also has to keep careful records regarding their funds in the account, otherwise it might look like the applicant is giving away funds when the non-applicant is using their own money from the joint account.

If applicants are found in violation of the Look-Back Period, their Medicaid applications will be denied and they will be penalized with a period of Medicaid ineligibility. The length of time of that period will depend on the state and the amount of money that violated Look-Back rules.

It’s important to note that the Look-Back Period does not apply to ABD Medicaid. It only applies to Nursing Home Medicaid and HCBS Waivers. So, an ABD Medicaid applicant could give away their funds in a joint bank account to get under the asset limit and become Medicaid eligible. But ABD applicants should be cautious about giving away their assets. They might eventually need Nursing Home Medicaid or HCBS Waivers and they will be denied that coverage for giving away their assets.


How the Titling of Joint Bank Accounts Impacts Medicaid Eligibility

How a joint bank account is titled also plays a major role in how it impacts Medicaid eligibility. The account can be titled with an “or” (Bea Williams or Jill Williams) or an “and” (Bea Williams and Jill Williams) between the names of the owners.

“Or” Accounts
“Or” accounts (Bea Williams or Jill Williams) are commonly used when a parent adds an adult child to their bank account to pay bills on their behalf. This type of account allows either person named on the account to take money out without permission of the other. Medicaid does not consider adding the adult child’s name to the account to be giving the funds in the account to the child. In other words, simply adding the child’s name does not violate Medicaid’s Look-Back Period.

“And” Accounts
With “and” accounts (Bea Williams and Jill Williams), neither person named on the account can take money out without permission of the other. Both signatures are required to write a check or withdraw money. Medicaid considers adding an adult child or anyone else to this type of joint account to be a violation of the Look-Back Period.


What To Do If You Have a Joint Bank Account

If potential Medicaid applicants do have a joint bank account with anyone other that their spouse, the most important thing they can is keep detailed records of all deposits and withdraws from the account. That goes for the potential Medicaid applicant and the co-owner of the joint account. All of those records will need to be submitted to the state along with the Medicaid application.

Given the complexity of joint bank accounts and Medicaid eligibility, seniors who have them are encouraged to consult with a professional like a Certified Medicaid Planner or an Elder Law Attorney before completing their Medicaid application.