Certified Medicaid Planner Exam
Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A | Instant Download Pdf
1. Which of the following is the primary purpose of Medicaid
planning?
A. Minimize state taxes
B. Protect assets from creditors
C. Ensure eligibility for Medicaid benefits while preserving assets
D. Avoid paying Medicare premiums
Answer: C. Ensure eligibility for Medicaid benefits while preserving
assets
Rationale: Medicaid planning involves structuring assets and income in
a legal manner to qualify for Medicaid benefits, particularly long-term
care, while protecting as much of the applicant’s wealth as legally
permissible. It is not about avoiding taxes or Medicare premiums.
,2. What is the Medicaid “look-back period” for asset transfers?
A. 12 months
B. 24 months
C. 36 months
D. 60 months
Answer: D. 60 months
Rationale: The Medicaid look-back period is generally 5 years (60
months) prior to the application date. Transfers of assets during this
time can result in penalties affecting eligibility.
3. Which asset is typically considered exempt under Medicaid rules?
A. Second home
B. Cash in bank accounts
C. Primary residence up to a certain equity limit
D. Luxury vehicles
Answer: C. Primary residence up to a certain equity limit
Rationale: Medicaid allows applicants to retain their primary residence
if the equity does not exceed state-set limits. Other assets like second
,homes, luxury vehicles, or non-exempt cash are counted toward
eligibility.
4. Which of the following is an example of a transfer penalty?
A. Transferring a car to a child below fair market value within the look-
back period
B. Paying for home improvements during Medicaid application
C. Purchasing exempt assets with income
D. Paying off a medical debt
Answer: A. Transferring a car to a child below fair market value within
the look-back period
Rationale: Medicaid imposes a penalty for uncompensated transfers
(i.e., giving away assets below market value) during the look-back
period. Paying debts or improving the home does not typically trigger a
transfer penalty.
5. Medicaid spend-down strategies are used to:
A. Increase retirement income
B. Convert countable assets into exempt assets
, C. Reduce medical expenses
D. Maximize Social Security benefits
Answer: B. Convert countable assets into exempt assets
Rationale: Spend-down strategies involve legally converting countable
assets (cash, investments) into exempt assets (home improvements,
pre-paid funeral, certain annuities) to meet Medicaid eligibility
requirements.
6. Which type of trust is generally used to protect assets from
Medicaid while still allowing the grantor access?
A. Revocable trust
B. Irrevocable Medicaid trust
C. Testamentary trust
D. Special needs trust
Answer: B. Irrevocable Medicaid trust
Rationale: An irrevocable Medicaid trust removes assets from the
grantor’s ownership, protecting them from Medicaid’s asset calculation.
Revocable trusts do not offer protection since the grantor retains
control.
Questions And Correct Answers
(Verified Answers) Plus Rationales 2026
Q&A | Instant Download Pdf
1. Which of the following is the primary purpose of Medicaid
planning?
A. Minimize state taxes
B. Protect assets from creditors
C. Ensure eligibility for Medicaid benefits while preserving assets
D. Avoid paying Medicare premiums
Answer: C. Ensure eligibility for Medicaid benefits while preserving
assets
Rationale: Medicaid planning involves structuring assets and income in
a legal manner to qualify for Medicaid benefits, particularly long-term
care, while protecting as much of the applicant’s wealth as legally
permissible. It is not about avoiding taxes or Medicare premiums.
,2. What is the Medicaid “look-back period” for asset transfers?
A. 12 months
B. 24 months
C. 36 months
D. 60 months
Answer: D. 60 months
Rationale: The Medicaid look-back period is generally 5 years (60
months) prior to the application date. Transfers of assets during this
time can result in penalties affecting eligibility.
3. Which asset is typically considered exempt under Medicaid rules?
A. Second home
B. Cash in bank accounts
C. Primary residence up to a certain equity limit
D. Luxury vehicles
Answer: C. Primary residence up to a certain equity limit
Rationale: Medicaid allows applicants to retain their primary residence
if the equity does not exceed state-set limits. Other assets like second
,homes, luxury vehicles, or non-exempt cash are counted toward
eligibility.
4. Which of the following is an example of a transfer penalty?
A. Transferring a car to a child below fair market value within the look-
back period
B. Paying for home improvements during Medicaid application
C. Purchasing exempt assets with income
D. Paying off a medical debt
Answer: A. Transferring a car to a child below fair market value within
the look-back period
Rationale: Medicaid imposes a penalty for uncompensated transfers
(i.e., giving away assets below market value) during the look-back
period. Paying debts or improving the home does not typically trigger a
transfer penalty.
5. Medicaid spend-down strategies are used to:
A. Increase retirement income
B. Convert countable assets into exempt assets
, C. Reduce medical expenses
D. Maximize Social Security benefits
Answer: B. Convert countable assets into exempt assets
Rationale: Spend-down strategies involve legally converting countable
assets (cash, investments) into exempt assets (home improvements,
pre-paid funeral, certain annuities) to meet Medicaid eligibility
requirements.
6. Which type of trust is generally used to protect assets from
Medicaid while still allowing the grantor access?
A. Revocable trust
B. Irrevocable Medicaid trust
C. Testamentary trust
D. Special needs trust
Answer: B. Irrevocable Medicaid trust
Rationale: An irrevocable Medicaid trust removes assets from the
grantor’s ownership, protecting them from Medicaid’s asset calculation.
Revocable trusts do not offer protection since the grantor retains
control.
