For 2026, the spouse who stays at home can keep at least $32,532 and at most $162,660 in countable resources, with the exact amount depending on the state's rules (CMS, Informational Bulletin: Updated 2026 SSI and Spousal Impoverishment Standards, April 27, 2026).
What spend-down means
Medicaid can pay for nursing home care, but it is means-tested. To qualify, a person's countable resources must be at or below the state's limit. Spending savings down to that limit, on care and other things of fair value, is the spend-down.
The limit for a single person varies by state. Many states use the Supplemental Security Income resource standard, which is $2,000 for an individual in 2026 (CMS, Informational Bulletin: Updated 2026 SSI and Spousal Impoverishment Standards, April 27, 2026), but some use a different figure. Your state Medicaid office can tell you the current limit.
Spending is different from giving. Paying fair value for care, a needed repair or a debt is spend-down. Giving money away, or selling something for less than it is worth, is a transfer that can trigger a penalty under the Medicaid look-back period.
Countable and exempt assets
Most states start from the federal Supplemental Security Income (SSI) resource rules, then make their own adjustments. Under those federal rules, these are excluded (42 U.S.C. 1382b and 20 CFR 416.1210, checked October 14, 2026):
- The home, including the land it sits on.
- Household goods and personal effects.
- One automobile used for transportation, regardless of value (20 CFR 416.1218).
- Burial spaces, and some other items within limits.
Checking and savings accounts, CDs, brokerage accounts, second homes and extra vehicles are generally countable. How retirement accounts and annuities are treated varies by state, so ask.
The home has limits of its own. For nursing home Medicaid, a person whose home equity is above the state's limit is not eligible. In 2026 states choose a limit between $752,000 and $1,130,000 (CMS, Informational Bulletin: Updated 2026 SSI and Spousal Impoverishment Standards, April 27, 2026). The limit does not apply while a spouse, or a child under 21 or a blind or disabled child, lives in the home (42 U.S.C. 1396p(f), checked October 14, 2026). Federal law also says a reverse mortgage or home equity loan may be used to reduce equity (same source). Under the SSI rule many states follow, a home stays a principal residence while the person is in a facility if a spouse or dependent relative still lives there; otherwise intent to return matters (20 CFR 416.1212(c), checked October 14, 2026). States differ here, so confirm yours.
Married couples: the snapshot and the spousal allowance
When one spouse needs nursing home care, federal spousal impoverishment rules protect the spouse who stays home, called the community spouse. At the start of the first continuous stay in a facility, the state totals the countable resources of both spouses, no matter whose name is on them, and computes a spousal share equal to half (42 U.S.C. 1396r-5(c)(1), checked October 14, 2026). Either spouse may ask the state for this assessment at that time (same source).
The community spouse resource allowance is then the greatest of: the state's minimum standard, or the spousal share up to the federal maximum (42 U.S.C. 1396r-5(f)(2)). For 2026 the federal minimum is $32,532 and the maximum is $162,660 (CMS, Informational Bulletin: Updated 2026 SSI and Spousal Impoverishment Standards, April 27, 2026). A state may set its standard higher than the minimum, up to the maximum, so in some states the community spouse keeps the maximum no matter how the half works out. The rest, above the nursing home spouse's own small limit, must be spent down.
Income is handled separately. The community spouse's own income is not counted as available to the spouse in the nursing home (42 U.S.C. 1396r-5(b)(1)). If the community spouse's income is low, part of the other spouse's income can be set aside so the community spouse has at least the minimum monthly maintenance needs allowance: $2,705 a month in every state except Alaska and Hawaii, from July 1, 2026, up to a maximum of $4,066.50 (CMS, Informational Bulletin: Updated 2026 SSI and Spousal Impoverishment Standards, April 27, 2026). Either spouse can ask for a fair hearing on these amounts, and exceptional circumstances causing significant financial duress can raise the allowance (42 U.S.C. 1396r-5(e)(2)).
Income limits in some states
Some states cap the income a nursing home applicant can have. CMS lists the 2026 income cap at $2,982 a month, which is 300% of the SSI federal benefit rate (CMS, Informational Bulletin: Updated 2026 SSI and Spousal Impoverishment Standards, April 27, 2026). In states that use a cap, a person with income above it may qualify by placing income in a special trust, often called a qualified income trust, that pays the state back after death (42 U.S.C. 1396p(d)(4)(B), checked October 14, 2026). After eligibility, the resident's income, minus a personal needs allowance, any allowance for the community spouse and certain other deductions, goes toward the cost of care (42 U.S.C. 1396r-5(d)(1)).
When paying privately first can make sense
Spend-down is how the system is designed: Medicaid is meant to be the payer after private money runs out. Spending on things that help, like home repairs, a hearing aid, or paying off a mortgage, is allowed when it is at fair value, and can improve life for both spouses. Some families prefer to pay privately for a time while they compare facilities, then apply when savings reach the limit.
If long-term care insurance is part of your plan, some states run partnership programs in which assets equal to the benefits a qualifying policy has paid are disregarded when Medicaid counts resources (42 U.S.C. 1396p(b)(1)(C), checked October 14, 2026). See is long-term care insurance worth it.
For free help, your Area Agency on Aging can be found through the Eldercare Locator (1-800-677-1116). An elder law attorney in your state can review a plan before you spend or move money.
A plain example: a married couple with $400,000
Hypothetical: one spouse enters a nursing home in 2026. Besides their home and one car, the couple has $400,000 in countable savings. We assume the nursing home spouse may keep $2,000 (a common state limit; yours may differ). Monthly cost uses the national median for a semi-private room, $9,581 (CareScout Cost of Care Survey 2025, data tables dated March 2, 2026). See how much long-term care costs where you live.
| Countable savings and state approach | Community spouse keeps | Amount to spend down | Months of care at $9,581 |
|---|---|---|---|
| $400,000, state uses half (spousal share) | $162,660 | $235,340 | 24.6 |
| $400,000, state lets spouse keep the maximum | $162,660 | $235,340 | 24.6 |
| $200,000, state uses half (spousal share) | $100,000 | $98,000 | 10.2 |
| $200,000, state lets spouse keep the maximum | $162,660 | $35,340 | 3.7 |
Arithmetic: with $400,000, half is $200,000, which is above the 2026 maximum, so the allowance is capped at $162,660 in either kind of state. $400,000 minus $162,660 minus $2,000 = $235,340, and $235,340 / $9,581 = 24.6 months. With $200,000, a half-share state allows $100,000 ($200,000 minus $100,000 minus $2,000 = $98,000), while a maximum state allows $162,660 ($200,000 minus $162,660 minus $2,000 = $35,340). The same couple can face very different spend-downs depending on the state.
Red flags
- Being told the asset limit is $2,000 everywhere. States set their own limits.
- Advice to give money to children to "get under the limit" quickly. That is a transfer, not a spend-down, and can cause a penalty.
- A pitch to move savings into an annuity without showing, in writing, how it meets federal and state Medicaid rules.
- Assuming the house is always safe, without checking the state's home equity limit and estate recovery rules.
- Being told the spouse at home must spend everything too.
- Retitling accounts into one spouse's name to hide them. Both spouses' resources are counted at the snapshot.
- Prepaying large amounts to a facility or a relative without a written fair-value agreement.
- A planner who will not say which state's rules the advice is based on.
- Skipping the resource assessment and guessing at the spousal share.
- Paying for a "Medicaid plan" from someone who is not a licensed attorney in your state.
Questions to ask before you sign
- What is my state's resource limit for a single nursing home applicant?
- Does my state use the half-share rule or let the community spouse keep the maximum allowance?
- Which of our accounts, including IRAs and annuities, are countable in my state?
- What is my state's home equity limit for nursing home Medicaid?
- Can we request the resource assessment now, before we apply?
- How much of my spouse's income can be set aside for me under the maintenance needs allowance?
- Does my state have an income cap, and would a qualified income trust be needed?
- What spending counts as fair value, and what records should we keep?
- If we pay off the mortgage or repair the home, how will that be treated?
- What can we appeal through a fair hearing, and what is the deadline?
Long-Term Care and Your Home: Read This Before You Sign
A one-page checklist: what Medicare will and will not pay, the Medicaid look-back and estate recovery basics, the questions to ask before you buy long-term care coverage or take a reverse mortgage, and the tax rules if the house is sold. Spend-down basics on one page: what counts, what the spouse at home keeps, and what to ask your state. We’ll email it to you.
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Sources
- CMS: Informational Bulletin, Updated 2026 SSI and Spousal Impoverishment Standards (April 27, 2026)
- Cornell Law School LII: 42 U.S. Code 1396r-5, Treatment of income and resources for certain institutionalized spouses (checked October 14, 2026)
- Cornell Law School LII: 42 U.S. Code 1396p, Liens, adjustments and recoveries, and transfers of assets (checked October 14, 2026)
- Cornell Law School LII: 42 U.S. Code 1382b, Resources (checked October 14, 2026)
- Cornell Law School LII: 20 CFR 416.1212, Exclusion of the home (checked October 14, 2026)
- CareScout: Cost of Care Survey 2025 (data tables dated March 2, 2026)
- Administration for Community Living: Eldercare Locator (checked October 14, 2026)
The Retirement Literacy Foundation is a 501(c)(3) public charity. This page is general education, not tax, legal or investment advice. Nothing is sold here, no product is recommended, and RLF accepts no funding from financial companies. Rules and figures change; each one above shows its source and date. Check anything you plan to act on with your state insurance department or a qualified professional who is not paid on the product.