Medicaid and Long Term Care: How Qualification Works
Medicaid pays for long-term care only after you've spent down countable assets to your state's limit (commonly around $2,000 for a single person), with income rules, a 5-year look-back penalizing gifts, spousal impoverishment protections for married couples — and estate recovery afterward.
The three tests
- Care need: a nursing-home level of care assessment; home and community services (HCBS waivers) use similar criteria with waiting lists in many states
- Assets: countable assets under the state limit — the home (within equity caps, while a spouse lives there), one vehicle, and personal effects are typically exempt; savings and investments count
- Income: limits vary by state; “income cap” states use Miller trusts to qualify above the cap; most income then goes to the care cost
The 5-year look-back
Applications review 60 months of transfers. Gifts and below-market sales in that window create penalty periods of ineligibility proportional to the amount given away — the rule that catches families who “gave the house to the kids” two years before applying. (California has been phasing out its asset test and look-back under state reform — an exception, not the pattern.)
Married couples: spousal protections
The at-home spouse keeps a Community Spouse Resource Allowance — roughly half of countable assets up to a federal maximum (about $157,920 in 2025, indexed) with a floor — plus an income allowance, and the home while living there. These rules exist precisely so one spouse's nursing care doesn't impoverish the other, but they still leave the household far below where private coverage would.
Planning notes
- Estate recovery: states must seek repayment from probate estates for care paid — the home often becomes the target after both spouses die
- Partnership policies shield assets dollar-for-dollar from spend-down — how partnership protection works
- Choice of setting: Medicaid guarantees nursing facility coverage; home and assisted-living coverage depends on waiver availability — a key reason people buy private coverage
- Get elder-law help — Medicaid planning is state-specific and mistakes inside the look-back window are expensive
Frequently asked questions
How much money can you keep and still get Medicaid long term care?
What is the Medicaid 5-year look-back?
Can Medicaid take your house?
Does Medicaid pay for home care or assisted living?
Exploring care options for a family member right now? A senior living advisor can help you compare local assisted living and memory care communities at no cost to your family.
Find local care options →Disclosure: We may earn a commission from referral links on this page. This does not affect our editorial content.