Medicaid Exempt Assets: What Medicaid Does Not Count in 2026
Medicaid splits everything you own into two groups. Countable assets must be spent down before Medicaid pays for nursing home care. Exempt assets are not counted at all. Knowing the difference can save a family thousands of dollars. This page lists the Medicaid exempt assets for 2026, the assets that count, the Iowa and Nebraska limits, and how to move money from one group to the other.
Exempt vs. Countable Assets
A countable asset is anything you could turn into cash, such as a bank account or stocks. Medicaid adds these up and compares the total to your state's asset limit. In Iowa, a single applicant can keep $2,000. In Nebraska, the limit is $4,000.
An exempt asset is left out of that total. You can keep it and still qualify for Medicaid, as long as it stays within any limit your state sets.
8 Medicaid Exempt Assets
1. Your home
Your primary home is exempt if your equity is under the limit. In 2026, the home equity limit is $752,000 in both Iowa and Nebraska. The limit does not apply if your spouse, a child under 21, or a blind or disabled child lives in the home.
2. One vehicle
Medicaid does not count one vehicle used for transportation.
3. Household goods and personal items
Furniture, appliances, clothing, and personal belongings are exempt.
4. An irrevocable funeral trust
Medicaid does not count an irrevocable funeral trust, up to your state's limit. Nebraska allows up to $6,696. Iowa allows $13,125, or up to $15,000 with an itemized list of funeral goods and services. Learn how Medicaid treats a funeral trust.
5. Burial spaces
A burial plot, crypt, casket, vault, and headstone are exempt. In Iowa, this covers burial spaces for you, your spouse, and immediate family members.
6. Small life insurance policies
In Iowa and Nebraska, life insurance with a total face value of $1,500 or less is exempt.
7. A small burial fund
Up to $1,500 set aside in a separate account for burial is exempt in Iowa.
8. Property used to earn a living
Property you need for self-support, such as business equipment, can be exempt.
Assets Medicaid Counts
Checking and savings accounts.
CDs and money market accounts.
Stocks, bonds, and mutual funds.
Extra real estate, such as a cabin or rental property.
Extra vehicles, boats, and RVs.
Life insurance above the limit.
IRAs, depending on your state.
2026 Medicaid Limits in Iowa and Nebraska
Asset limit for a single applicant
$2,000 in Iowa, $4,000 in Nebraska.
Home equity limit
$752,000 in both states.
Funeral trust limit
$13,125 in Iowa, or $15,000 with itemized goods and services. $6,696 in Nebraska.
Life insurance limit
$1,500 in both states.
Spouse at home can keep
$32,532 to $162,660 in both states.
These figures change each year. I check your state's numbers on our call.
How to Turn Countable Assets into Exempt Assets
This is the heart of a Medicaid spend down. You can spend countable money on exempt items at fair market value. The money leaves the countable column, and you keep something you need.
Common examples include a funeral trust, home repairs, a replacement vehicle, and new household items. See the full list of allowable Medicaid spend down items.
The irrevocable funeral trust is often the first step. It moves money into an exempt asset in one call, and it covers a bill your family will face anyway.
Rules for Married Couples
When one spouse needs nursing home care, the spouse at home can keep more. In 2026, the spouse at home can keep between $32,532 and $162,660 in countable assets. The home, one vehicle, and other exempt assets are protected on top of that amount.
Each spouse can also have an irrevocable funeral trust.
Exempt Does Not Always Mean Safe Forever
An exempt asset does not count when you apply. After the Medicaid recipient passes, the state may try to recover what it paid through estate recovery. A home is the most common target. Talk to an elder law attorney about protecting the home long term.
A funeral trust works differently. The money is spent on the funeral, so it is used for its purpose.
Medicaid Exempt Assets FAQs
What assets are exempt from Medicaid?
Your home within the equity limit, one vehicle, household goods, personal items, an irrevocable funeral trust, burial spaces, and small life insurance policies.
Is my house exempt from Medicaid?
Usually, yes. In 2026, your equity must be under $752,000 in Iowa and Nebraska, unless a spouse or dependent child lives there.
Does a funeral trust count as an asset for Medicaid?
Not if it is irrevocable and within your state's limit. Nebraska allows $6,696. Iowa allows $13,125, or $15,000 with itemized goods and services.
Are IRAs exempt from Medicaid?
It depends on your state. Some states count IRAs, and others exempt them in certain cases.
Can I turn countable assets into exempt assets?
Yes. Spending countable money on exempt items at fair market value is the core of a Medicaid spend down.
Protect More of Your Savings
One call shows you which of your assets count, your state's limits, and how much a funeral trust can protect. There is no cost and no obligation.
Funeral Trust Gal is part of the Aging Parent Resource Center.
Sara Guida is a licensed insurance agent, not an attorney, and does not represent any state Medicaid agency. Content on this site is general education, not legal or financial advice. Medicaid rules and funeral trust limits vary by state.