CERTIFIED MEDICAID PLANNER (CMP™) EXAM
Practice Questions with Answers & Rationales
1. Medicaid is best described as a:
A. Purely federal program with identical rules in every state
B. Joint federal-state program in which states administer benefits within federal guidelines, resulting in
state-by-state variation
C. Private insurance program
D. A supplement paid directly to Medicare beneficiaries only
Correct Answer: B
Rationale: Medicaid is jointly funded by federal and state governments; states have latitude within federal
minimums, which is why rules and dollar limits vary by state.
2. Which federal agency has primary oversight of the Medicaid program at the federal level?
A. The Social Security Administration (SSA)
B. The Centers for Medicare & Medicaid Services (CMS)
C. The Department of Labor
D. The Internal Revenue Service (IRS)
Correct Answer: B
Rationale: CMS, part of the Department of Health and Human Services, oversees federal Medicaid policy
and approves state plans and waivers.
3. A 'state plan' Medicaid benefit differs from a Medicaid 'waiver' program primarily in that:
A. State plan benefits are optional for states to offer, while waivers are mandatory
B. Waiver programs allow states to deviate from certain standard federal requirements, often to expand
home and community-based services
C. State plans only cover nursing facility care
D. Waivers eliminate all financial eligibility requirements
Correct Answer: B
Rationale: Waivers (e.g., HCBS waivers under Section 1915(c)) let states test alternatives to standard rules,
frequently to fund community-based long-term care.
4. Long-term care Medicaid eligibility is generally assessed using which two broad categories
of criteria?
A. Age and citizenship only
B. Financial (income and asset) criteria and functional/medical (level of care) criteria
C. Marital status and employment history
D. Credit score and property tax history
Correct Answer: B
, Rationale: Applicants must meet both financial eligibility limits and a medical/functional need for a
nursing-facility level of care.
5. Which of the following is generally true about Medicaid planning across states?
A. All 50 states use identical countable asset limits and exemption rules
B. Because Medicaid is state-administered within federal guidelines, specific dollar limits and certain
rules can differ meaningfully from state to state
C. Medicaid planning rules are set entirely by the IRS
D. Medicaid eligibility rules cannot change from year to year
Correct Answer: B
Rationale: State variation is a defining feature of Medicaid, making it essential for planners to verify current
rules in the applicable state.
6. A Certified Medicaid Planner's role is best described as:
A. Providing legal representation in court on Medicaid appeals only
B. Providing specialized planning guidance to help individuals and families navigate Medicaid eligibility
rules, often working alongside attorneys and financial advisors
C. Approving or denying Medicaid applications on behalf of the state
D. Selling long-term care insurance exclusively
Correct Answer: B
Rationale: CMPs typically provide specialized planning knowledge as part of a broader team, since only the
state Medicaid agency makes eligibility determinations.
7. Under an 'income cap' (or '300%') state's rules, an applicant whose gross income exceeds
the cap may still qualify for long-term care Medicaid by using which planning tool?
A. A revocable living trust
B. A qualifying (Miller) income trust / Qualified Income Trust (QIT)
C. A 529 education plan
D. A traditional IRA rollover
Correct Answer: B
Rationale: In income-cap states, excess income can be directed into a Qualified Income Trust (often called a
Miller Trust) to meet the income limit for eligibility.
8. The 'income-first' rule generally applies to which planning consideration for married
couples?
A. How to allocate income between spouses when determining the community spouse's minimum
monthly needs allowance
B. How to title a home for capital gains purposes
C. How to calculate federal income tax withholding
D. How to determine estate tax liability
Correct Answer: A
Rationale: The income-first rule addresses whether available income (before resources) is used first to meet
the community spouse's minimum monthly maintenance needs allowance.
9. Which of the following is generally counted as income for Medicaid eligibility purposes?
A. Social Security retirement benefits
B. The applicant's home equity
, C. A irrevocable burial trust's principal
D. Household furniture value
Correct Answer: A
Rationale: Recurring income sources like Social Security, pensions, and annuity payments are generally
counted as income, distinct from asset/resource counting.
10. The Minimum Monthly Maintenance Needs Allowance (MMMNA) is designed to:
A. Limit how much income the institutionalized spouse may keep
B. Ensure the community spouse (the spouse remaining at home) has a minimum amount of monthly
income for living expenses
C. Set a cap on nursing home charges
D. Determine estate recovery amounts
Correct Answer: B
Rationale: The MMMNA protects the at-home spouse from impoverishment by guaranteeing a floor level of
monthly income, potentially through income diversion from the institutionalized spouse.
11. A 'personal needs allowance' in the Medicaid context refers to:
A. The amount a nursing facility resident may keep from their own income for personal expenses
before the remainder goes toward cost of care
B. The total resource limit for a single applicant
C. A one-time relocation stipend
D. A federal tax deduction for medical expenses
Correct Answer: A
Rationale: Residents in a facility are generally allowed to retain a small personal needs allowance from their
income, with the rest applied to the cost of care ('patient pay amount').
12. Which of the following is typically considered a 'countable' resource for Medicaid
eligibility?
A. The applicant's primary residence (up to equity limits) while they intend to return
B. A second investment property with no exemption
C. A single vehicle used for transportation
D. Household goods and personal effects
Correct Answer: B
Rationale: Most states exempt the primary home (within equity limits), one vehicle, and personal belongings,
but additional real estate is generally countable.
13. The primary residence is generally exempt from countable resources for Medicaid
purposes, subject to:
A. No conditions whatsoever, always fully exempt regardless of value
B. An equity value limit set within a federally established range, and the applicant's intent to return
home or presence of certain dependents/relatives
C. Only being exempt if it has no mortgage
D. Being exempt only in community property states
Correct Answer: B
Rationale: Federal law sets a floor and ceiling for the home equity exemption, and states select an amount
within that range, with intent-to-return generally protecting the home even during a nursing facility stay.
Practice Questions with Answers & Rationales
1. Medicaid is best described as a:
A. Purely federal program with identical rules in every state
B. Joint federal-state program in which states administer benefits within federal guidelines, resulting in
state-by-state variation
C. Private insurance program
D. A supplement paid directly to Medicare beneficiaries only
Correct Answer: B
Rationale: Medicaid is jointly funded by federal and state governments; states have latitude within federal
minimums, which is why rules and dollar limits vary by state.
2. Which federal agency has primary oversight of the Medicaid program at the federal level?
A. The Social Security Administration (SSA)
B. The Centers for Medicare & Medicaid Services (CMS)
C. The Department of Labor
D. The Internal Revenue Service (IRS)
Correct Answer: B
Rationale: CMS, part of the Department of Health and Human Services, oversees federal Medicaid policy
and approves state plans and waivers.
3. A 'state plan' Medicaid benefit differs from a Medicaid 'waiver' program primarily in that:
A. State plan benefits are optional for states to offer, while waivers are mandatory
B. Waiver programs allow states to deviate from certain standard federal requirements, often to expand
home and community-based services
C. State plans only cover nursing facility care
D. Waivers eliminate all financial eligibility requirements
Correct Answer: B
Rationale: Waivers (e.g., HCBS waivers under Section 1915(c)) let states test alternatives to standard rules,
frequently to fund community-based long-term care.
4. Long-term care Medicaid eligibility is generally assessed using which two broad categories
of criteria?
A. Age and citizenship only
B. Financial (income and asset) criteria and functional/medical (level of care) criteria
C. Marital status and employment history
D. Credit score and property tax history
Correct Answer: B
, Rationale: Applicants must meet both financial eligibility limits and a medical/functional need for a
nursing-facility level of care.
5. Which of the following is generally true about Medicaid planning across states?
A. All 50 states use identical countable asset limits and exemption rules
B. Because Medicaid is state-administered within federal guidelines, specific dollar limits and certain
rules can differ meaningfully from state to state
C. Medicaid planning rules are set entirely by the IRS
D. Medicaid eligibility rules cannot change from year to year
Correct Answer: B
Rationale: State variation is a defining feature of Medicaid, making it essential for planners to verify current
rules in the applicable state.
6. A Certified Medicaid Planner's role is best described as:
A. Providing legal representation in court on Medicaid appeals only
B. Providing specialized planning guidance to help individuals and families navigate Medicaid eligibility
rules, often working alongside attorneys and financial advisors
C. Approving or denying Medicaid applications on behalf of the state
D. Selling long-term care insurance exclusively
Correct Answer: B
Rationale: CMPs typically provide specialized planning knowledge as part of a broader team, since only the
state Medicaid agency makes eligibility determinations.
7. Under an 'income cap' (or '300%') state's rules, an applicant whose gross income exceeds
the cap may still qualify for long-term care Medicaid by using which planning tool?
A. A revocable living trust
B. A qualifying (Miller) income trust / Qualified Income Trust (QIT)
C. A 529 education plan
D. A traditional IRA rollover
Correct Answer: B
Rationale: In income-cap states, excess income can be directed into a Qualified Income Trust (often called a
Miller Trust) to meet the income limit for eligibility.
8. The 'income-first' rule generally applies to which planning consideration for married
couples?
A. How to allocate income between spouses when determining the community spouse's minimum
monthly needs allowance
B. How to title a home for capital gains purposes
C. How to calculate federal income tax withholding
D. How to determine estate tax liability
Correct Answer: A
Rationale: The income-first rule addresses whether available income (before resources) is used first to meet
the community spouse's minimum monthly maintenance needs allowance.
9. Which of the following is generally counted as income for Medicaid eligibility purposes?
A. Social Security retirement benefits
B. The applicant's home equity
, C. A irrevocable burial trust's principal
D. Household furniture value
Correct Answer: A
Rationale: Recurring income sources like Social Security, pensions, and annuity payments are generally
counted as income, distinct from asset/resource counting.
10. The Minimum Monthly Maintenance Needs Allowance (MMMNA) is designed to:
A. Limit how much income the institutionalized spouse may keep
B. Ensure the community spouse (the spouse remaining at home) has a minimum amount of monthly
income for living expenses
C. Set a cap on nursing home charges
D. Determine estate recovery amounts
Correct Answer: B
Rationale: The MMMNA protects the at-home spouse from impoverishment by guaranteeing a floor level of
monthly income, potentially through income diversion from the institutionalized spouse.
11. A 'personal needs allowance' in the Medicaid context refers to:
A. The amount a nursing facility resident may keep from their own income for personal expenses
before the remainder goes toward cost of care
B. The total resource limit for a single applicant
C. A one-time relocation stipend
D. A federal tax deduction for medical expenses
Correct Answer: A
Rationale: Residents in a facility are generally allowed to retain a small personal needs allowance from their
income, with the rest applied to the cost of care ('patient pay amount').
12. Which of the following is typically considered a 'countable' resource for Medicaid
eligibility?
A. The applicant's primary residence (up to equity limits) while they intend to return
B. A second investment property with no exemption
C. A single vehicle used for transportation
D. Household goods and personal effects
Correct Answer: B
Rationale: Most states exempt the primary home (within equity limits), one vehicle, and personal belongings,
but additional real estate is generally countable.
13. The primary residence is generally exempt from countable resources for Medicaid
purposes, subject to:
A. No conditions whatsoever, always fully exempt regardless of value
B. An equity value limit set within a federally established range, and the applicant's intent to return
home or presence of certain dependents/relatives
C. Only being exempt if it has no mortgage
D. Being exempt only in community property states
Correct Answer: B
Rationale: Federal law sets a floor and ceiling for the home equity exemption, and states select an amount
within that range, with intent-to-return generally protecting the home even during a nursing facility stay.
