The answer “It depends” is not much of a comfort when considering how college savings accounts will be treated for Medicaid purposes. However, it is, unfortunately, the most accurate answer. There are several factors that must be considered:
1. What type of account you used to set aside the college money;
2. How and when you funded the account; and
3. Whether you still have access to the money.
A recent nj.com article asks, “Will my college savings be counted for Medicaid?” If you can liquidate an account and access the money that you deposited, Medicaid will typically expect you to do so to fund your own care for as long as possible. Another challenge is that Medicaid will always penalize gifts. Odds are good that the funds you added to these college accounts are gifts.