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The Distribution of Assets in the Elderly Population Living in the Community

Individuals cannot qualify for Medicaid nursing home care or home and community-based services unless they meet their state's asset eligibility standards. Currently, states are required to examine all transfers for less than fair market value that occurred within 36 months prior to an individual's application for Medicaid. This issue paper examines the assets of elderly people living in the community, focusing on those most at risk of using nursing home care. The paper finds that most elderly people living in the community do not have assets, excluding home equity, sufficient to finance a nursing home stay of one year or more. Of the one million elderly at high risk for nursing home use, 84 percent have asset levels that would be exhausted within one year of nursing home care and, of these, three-quarters have asset levels less than $5000.

Issue Paper (.pdf)