Medicaid divides assets into exempt and countable categories. Exempt assets do not count for eligibility purposes. Asset conversion involves converting assets that would be counted against you for Medicaid purposes into assets that are exempt. Asset conversions are not subject to the five-year look-back period or transfer penalty. These are a few of the most common examples of asset conversion:
- Paying off mortgage on primary residence.
- Pay off credit cards and other debts.
- Pay for needed dental, vision or medical care.
- Replace existing car with a more expensive car.
- Make improvements to primary residence like a new roof, new windows or adding accessibility features.
- Purchase a prepaid funeral or irrevocable funeral trust.