Medicaid and long-term care: spend-down, look-back, and eligibility

Medicaid pays for more long-term care than any other source, but the rules are strict, vary by state, and reward planning ahead. Here is the shape of it.

Income and asset limits

Medicaid long-term-care eligibility turns on both income and countable assets. The asset limit is low — commonly about $2,000 for a single applicant. Countable assets are things like bank accounts and investments. Generally exempt (not counted) are your primary home up to an equity limit, one vehicle, personal belongings, and certain prepaid burial arrangements.

The spend-down

If you are over the asset limit, you “spend down” the excess on care and legitimate expenses until you qualify. You cannot simply give money away to get under the limit — see the look-back. Our spend-down estimator gives a rough sense of how many months private funds last before eligibility.

The five-year look-back

When you apply, the state reviews the prior five years (60 months) of financial records for gifts or transfers made for less than fair value. Assets moved during that window can trigger a penalty period of Medicaid ineligibility, calculated from the amount transferred. This is why do-it-yourself “asset protection” often backfires, and why elder-law attorneys plan years in advance.

Protections for the spouse at home

Federal “spousal impoverishment” rules protect a spouse who remains in the community. The at-home spouse can keep a share of the couple’s assets — the Community Spouse Resource Allowance, ranging from about $32,532 (minimum) to $162,660 (maximum) depending on the state (2026 federal figures; they rise most years and several states set their own — check your state) — plus a minimum monthly income allowance. These protections are significant and often misunderstood.

Does Medicaid cover assisted living?

For nursing homes, Medicaid must cover medically necessary care once you qualify — but a specific home still has to be Medicaid-certified and have a Medicaid bed available, and you must meet a functional level-of-care test. For assisted living, it depends: many states cover assisted-living services (not room and board) through a Home and Community-Based Services waiver, and waivers often have waiting lists. Check your state’s specific program.

Before acting, talk to a certified elder-law attorney. The rules are unforgiving and the stakes — a penalty period when you need care most — are high.

See the current income and asset limits for your state, and estimate your timeline with the spend-down calculator.

This guide is general information, not medical, legal, or financial advice. Rules vary by state and change over time. For personalized, unbiased help, your Area Agency on Aging and your state’s Long-Term Care Ombudsman are free.