Page 8
Louisiana Medicaid Eligibility Manual Eligibility Factors
Reissued October 21, 2025 Page 8 of I-1670 Replacing January 27, 2025 Revised/added text indicated by underscore Deleted text indicated by “**” balloon payments; and
o The promissory note, loan, or mortgage must prohibit the cancellation of the balance upon death of the lender.
Should the promissory note, loan, or mortgage not satisfy all of criteria, the amount of the asset transferred is the outstanding balance of the note, loan, or mortgage due as of the date of the individual’s application for Medicaid.
The life expectancy chart at Z-1200 Life Expectancy Tables is used to determine if the repayment is actuarially sound.
Should the promissory note, loan, or mortgage contain all of the criteria, refer to I-1630 Need – SSI-Related Resources and I-1530 Need – SSI-Related Income.
I-1673.2 Valid Loan/Valid Debt Defined
A valid loan or valid debt is a legally binding agreement made in good faith and is enforceable under State law.
Verify by obtaining a copy of the valid loan or debt owned or owed by the applicant.
If the loan or debt was a verbal agreement, obtain a sworn written statement from both the borrower and the lender as to the nature of the loan, the amount, obligation for repayment, and other terms and conditions surrounding the alleged debt.
Obtain documentary evidence of payments made by or to the applicant according to the terms of the loan agreement.
Contracts which are no longer enforceable are not valid. For example, agreements whether oral or written have a prescriptive period depending on the type of contract. Once that limitation period passes, and no lawsuit was filed, the debt does not need to be paid by the borrower. The creditor relinquishes its right to file suit and collect a debt that it is owed after this time period has expired. Questions regarding the enforceability of a contract should be referred to the Policy unit.