What is an asset test? It’s a limit, or a set maximum amount of assets (sometimes called resources), that a Medicare enrollee can have and still be eligible for a specific subsidy program. Assets include:
- Savings and checking accounts
- Stocks and bonds
- Retirement accounts
- Real estate
- Mutual funds
In every state, some resources will not be counted as assets, including money in a pre-paid burial expenses fund or money set aside in a designated account for burial costs. This is known as the “burial disregard.”
Below, we explain how counselors count the burial disregard in considering eligibility for the Part D Extra Help (Low Income Subsidy/LIS) benefit and Medicare Savings Programs (MSPs).
LIS and MSP asset alignment
Prior to the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008, states set MSP asset tests. Some states had generous asset tests, while others were less generous. MIPPA required all states to align their minimum MSP asset tests with the asset test for the lowest level of Extra Help/LIS, also known as full-subsidy LIS. Some states still have more generous asset tests.
Differences in treatment of the burial disregard
While states allow up to a $1,500 burial disregard for MSPs, some apply this disregard in a more restrictive manner than others. For instance, state Medicaid offices may disregard the burial amount only if the enrollee has a separate account or trust set up for burial funds. Additionally, the state may require documentation of the separate account.
In contrast, with the federal LIS application, applicants self-report their intention to spend assets for burial purposes in question #5: “Will some money from the sources listed in question 4 be used to pay for funeral or burial expenses?” If the person answers “yes,” they receive the $1,500 per person asset disregard (most answer “yes”). If the person answers “no,” the $1,500 asset disregard will not apply.
The chart below outlines the minimum asset tests and a $1,500 burial disregard per enrollee applied to LIS.
| 2024 Asset Tests | |||
|
|
MSP Asset Test |
+ Burial Allowance |
LIS Asset Test |
|
Individual |
$15,510 |
+ $1,500 = |
$17,010 |
|
Married Couple |
$30,950 |
+ $3,000 = |
$33,950 |
This minimum asset test applies to all MSPs (QMB, SLMB, QI) except the Qualified Disabled Working Individual (QDWI) program. Some states have higher MSP asset limits—and some have no MSP asset limits at all.
Enrollees should contact their local Medicaid office or State Health Insurance Assistance Program (SHIP) to learn more about MSPs in their state.
