All asset and allowance figures reflect 2026 federal and state Medicaid standards; long-term care cost figures reflect the 2024 Genworth/CareScout Cost of Care Survey, labeled inline. Rules vary by state and program — confirm your figures with your state Medicaid agency before applying.
TL;DR — Quick Verdict
- Most states cap a single long-term care applicant’s countable assets at $2,000 in 2026 — but California allows $130,000, New York roughly $32,396, and Illinois $17,500.
- The Community Spouse Resource Allowance (CSRA) lets a healthy spouse keep between $32,532 and $162,660 in 2026, per the CMS April 2026 bulletin.
- With a 2024 national median semi-private nursing home rate of $111,325 per year (Genworth), a couple with $200,000 saved can burn through it in under two years without planning.
- California vs. Connecticut: a single applicant keeps $130,000 in one state and $1,600 in the other — a $128,400 swing on identical facts.
- Recommendation: identify your state’s exact threshold first, then convert countable assets legally — never gift or transfer within the five-year lookback.
A single applicant in Connecticut can hold just $1,600 in countable assets before Medicaid says no. Cross the border into New York and the figure jumps to roughly $32,396; fly to California and it hits $130,000. Same federal program, an $128,400 gap — and that gap decides whether a family protects a lifetime of savings or watches it evaporate against a nursing home bill. The 2024 Genworth/CareScout Cost of Care Survey pegged the national median semi-private nursing home room at $111,325 per year, so the stakes are not abstract.
“Spend-down” is the process of legally reducing countable assets to your state’s threshold so Medicaid begins paying for long-term care. This guide maps the 2026 thresholds state by state, shows the math on how fast assets disappear, contrasts the two spousal-protection methods states use, and flags the mistakes that trigger penalties. Every asset figure here traces to the Centers for Medicare & Medicaid Services (CMS) or state Medicaid agencies. Firms like Jarvis Law Office and national planners at MedicaidPlanningAssistance publish annual updates, but the numbers below come from primary sources.
2026 Asset Thresholds: What Each State Actually Allows
The federal floor is deceptively simple: $2,000 in countable assets for a single applicant to Nursing Home Medicaid or a Home and Community-Based Services (HCBS) waiver. Countable assets mean bank balances, certificates of deposit, stocks, bonds, and second properties — not your primary home, one vehicle, or personal belongings. That $2,000 holds in most states in 2026, but the exceptions are large enough to change entire planning strategies.
California reinstated its Non-MAGI Medi-Cal asset limit effective January 1, 2026, at $130,000 for an individual and $195,000 for a couple — after eliminating the test entirely in 2024. New York sits at roughly $32,396 for an individual, Illinois at $17,500, and Michigan at $9,950 (tied to the Supplemental Security Income limit). Connecticut runs the tightest in the nation at $1,600. These are not rounding differences; they reshape who needs to spend down at all.
Source: Centers for Medicare & Medicaid Services and state Medicaid agencies, 2026 figures, compiled via MedicaidPlanningAssistance (verify at medicaidplanningassistance.org).
If you are comparing where to receive care, weigh the threshold against the underlying nursing home private room rates by state — a generous asset limit means little if local care costs run 40% above the national median.
How Fast Do Assets Actually Disappear?
Picture a widowed retiree in Ohio with $95,000 in a savings account and $40,000 in a brokerage — $135,000 in countable assets against a $2,000 threshold. She enters a nursing home at the 2024 national median semi-private rate of $111,325 per year, or about $9,277 per month. Medicaid will not pay a dollar until she is at $2,000.
Run the math. She must spend down $133,000. At $9,277 per month in private-pay costs, her assets cover roughly 14.3 months of care before Medicaid eligibility begins. During those fourteen months she pays the facility directly, and every payment is a legitimate spend-down — medical bills always count. The lesson is timing: eligibility is not a switch you flip on admission day; it is a runway measured in months.
Spend-down does not require handing everything to a nursing home, though. Countable assets can convert into exempt ones. Paying off a mortgage, replacing a failing roof, buying a reliable vehicle, prepaying an irrevocable funeral contract, and settling credit card or medical debt all reduce countable assets without “wasting” the money. A retiree who spends $30,000 modernizing her exempt home has preserved that value while moving toward eligibility. Understanding how the Medicaid 5-year lookback and transfer penalties interact with these conversions is essential — the difference between a legal conversion and a penalized transfer is often just documentation.
Spousal Protections: The 50% States vs. 100% States
When only one spouse needs care, federal spousal impoverishment rules stop the healthy “community spouse” from being wiped out. The core tool is the Community Spouse Resource Allowance (CSRA): in 2026, the healthy spouse keeps between $32,532 and $162,660 in countable assets, per the CMS CMCS Informational Bulletin issued April 27, 2026. The applicant spouse is still held to $2,000 in most states.
States apply this two ways. In “50% states,” the community spouse keeps half the couple’s combined countable assets, capped at $162,660. A couple with $300,000 protects $150,000 for the healthy spouse; a couple with $400,000 still protects only the $162,660 ceiling, and the rest must spend down. In “100% states,” the community spouse keeps all combined assets up to $162,660 regardless of the split — a materially better outcome for couples with modest savings. A couple with $120,000 protects the full $120,000 in a 100% state, but only $60,000 in a 50% state.
Source: Centers for Medicare & Medicaid Services, CMS CMCS Informational Bulletin, April 27, 2026 (verify at medicaid.gov).
Couples weighing whether to insure against this risk instead should compare these protections against long-term care insurance premiums by age, since a policy purchased at 55 can sidestep the spend-down question entirely.
California vs. Connecticut: Which Threshold System Is Better for a Single Applicant?
Consider an unmarried 78-year-old with $110,000 in savings who needs nursing home care. In Connecticut, the countable-asset limit is $1,600, so she must spend down roughly $108,400 before Medicaid pays. In California, the 2026 limit is $130,000 — her $110,000 sits entirely under the ceiling, and she qualifies immediately with zero spend-down while keeping every dollar.
The contrast is stark, but it is not the whole story. California’s Medi-Cal operates in a state where the same 2024 Genworth data show nursing home costs running well above the national $111,325 median, and California also imposes no home equity limit, which further shields property-rich applicants. Connecticut’s low threshold forces aggressive spend-down, yet its long-term care rates and estate recovery rules differ enough that raw threshold comparison misleads. Someone choosing between care settings should also weigh a home health aide vs nursing home comparison, because staying home can delay institutional Medicaid entirely.
Verdict
For a single applicant with $50,000–$130,000 in savings, California’s $130,000 threshold is dramatically more protective — often eliminating spend-down entirely. Connecticut’s $1,600 limit is the harshest, forcing near-total liquidation. But relocating solely for a threshold rarely pays off: residency rules, higher local care costs, and the five-year lookback usually erase the advantage. Optimize within your current state first; move only on a planner’s advice.
What Most People Get Wrong About Spend-Down
Three mistakes cost families more than any other, and each is avoidable with the right sequence of steps.
First: gifting money to children to “get under the limit.” The consequence is a transfer penalty. Medicaid’s five-year lookback reviews every transfer for less than fair market value, and gifts trigger a penalty period of ineligibility calculated from your state’s average monthly private-pay cost. The correct action is to convert countable assets into exempt ones — pay debt, improve the exempt home, buy an irrevocable funeral trust — none of which are gifts.
Second: assuming the home is always safe. The consequence is a nasty surprise, because equity above $752,000 in most states (higher in twelve states and DC) is countable, and estate recovery can claim the home after death. The correct action is to confirm your state’s home equity limit and understand estate recovery before assuming the house is protected. Families weighing property against care should also review assisted living costs and included services, which Medicaid covers far less generously than nursing home care.
Third: waiting until a crisis to act. The consequence is losing the option to plan around the lookback, which requires transfers to be made well before care is needed. The correct action is to model eligibility years ahead — pairing spend-down strategy with tools like a hybrid life insurance with LTC rider vs standalone policy or, for wartime veterans, Veterans Aid and Attendance rates and eligibility, which can supplement care without touching Medicaid at all.
Who Should Spend Down — and Who Shouldn’t?
Spend-down makes sense when someone needs long-term care now, has countable assets above their state’s threshold, and lacks a long-term care policy to cover the bill. A single applicant in a $2,000-limit state with $60,000 in savings and an immediate need for skilled care is a textbook candidate: the runway is short, the conversion options are clear, and Medicaid is the realistic payer.
It makes far less sense for those with substantial assets and years of runway, who may do better funding care privately or through insurance while preserving flexibility and choice of facility. It also rarely fits people whose income exceeds the 2026 long-term care cap of $2,982 per month for a single applicant — they may need a Qualified Income Trust or a medically needy pathway instead, depending on the state. And for couples where the healthy spouse is much younger, protecting income through the Monthly Maintenance Needs Allowance often matters more than racing to the asset threshold.
The honest answer for most families is a hybrid: some spend-down, some conversion, and often a bridge product. Before committing, compare the total cost of care paths — a PACE all-inclusive senior care costs program or a review of Medicare skilled nursing coverage and daily costs may cover the first 100 days and delay when spend-down even begins.
Frequently Asked Questions
What counts as a countable asset for Medicaid in 2026?
Countable assets include bank balances, CDs, stocks, bonds, mutual funds, and second properties. Exempt assets — which do not count toward the $2,000 limit in most states — include your primary home (up to $752,000 in equity in most states), one vehicle, personal belongings, and an irrevocable funeral trust. Converting countable assets into exempt ones is the core legal spend-down strategy, per CMS and state Medicaid guidance.
Can I give money to my kids to qualify faster?
No — not without penalty. Medicaid’s five-year lookback reviews all transfers for less than fair market value. Gifts made within that window trigger a penalty period of ineligibility, calculated using your state’s average monthly private-pay nursing home cost (a national median of $111,325 per year in 2024, per Genworth). Legitimate spend-down means spending on yourself or converting assets, not gifting them away.
How much can a healthy spouse keep in 2026?
Under the Community Spouse Resource Allowance, the healthy (community) spouse keeps between $32,532 and $162,660 in countable assets in 2026, per the CMS CMCS Informational Bulletin dated April 27, 2026. The exact figure depends on whether your state uses a 50% or 100% calculation method and on the couple’s total assets. The applicant spouse remains limited to $2,000 in most states.
Does income affect Medicaid spend-down separately from assets?
Yes. Assets and income are tested separately. In 2026, most states cap long-term care income at $2,982 per month for a single applicant (300% of the Federal Benefit Rate). Applicants over that cap may still qualify through a Qualified Income Trust or a medically needy spend-down pathway, depending on the state. Meeting the asset threshold does not automatically satisfy the income test.
How We Researched This Article
Every asset threshold, allowance, and limit in this article was verified against primary sources before publication. The 2026 Community Spouse Resource Allowance range ($32,532–$162,660), the minimum monthly maintenance needs allowance range, and the $752,000 home equity figure come directly from the Centers for Medicare & Medicaid Services CMCS Informational Bulletin issued April 27, 2026, published at Medicaid.gov. State-specific asset limits — California’s reinstated $130,000, New York’s $32,396, Illinois’s $17,500, Michigan’s $9,950, and Connecticut’s $1,600 — were compiled from state Medicaid agency figures aggregated by Certified Medicaid Planners at MedicaidPlanningAssistance, cross-checked against multiple 2026 state guides.
Long-term care cost figures — the $111,325 national median semi-private nursing home rate and the $127,750 private room rate — are measured, not modeled, drawn from the 2024 Genworth/CareScout Cost of Care Survey published by Genworth Financial, which surveyed more than 140,000 providers. The 2026 income cap of $2,982 per month reflects the updated Federal Benefit Rate. Spend-down runway calculations and the couple scenarios are original models built from these verified inputs; they illustrate typical outcomes and are not guarantees, since individual eligibility depends on state method, exemptions, and timing.
Limitations: state asset limits can change mid-year through budget action, as California’s 2024 elimination and 2026 reinstatement demonstrate, and the CSRA method (50% versus 100%) is not captured in a single national figure. Cost-of-care medians mask wide regional variation. This research was last conducted July 2026. All figures were verified against named primary sources before publication.