“Spend down” is two different rules wearing one name. One is about assets, and it means getting your countable savings under a hard dollar limit. The other is about income, and it means subtracting medical bills from your monthly income until what is left falls under your state’s threshold. Most people needing long-term care run into both.
Every figure below was pulled on September 6, 2026 from the CMS Center for Medicaid and CHIP Services standards chart, the federal statute and regulations, and KFF’s March 2026 50-state survey. Medicaid is administered state by state, so the federal numbers are a framework, not a promise about your county office.
The 2026 Federal Numbers
Almost every long-term care Medicaid limit is pegged to the Supplemental Security Income federal benefit rate. CMS published the updated 2026 chart in an informational bulletin dated April 27, 2026.
| 2026 standard | Individual | Couple |
|---|---|---|
| SSI federal benefit rate | $994/mo | $1,491/mo |
| SSI countable resource standard | $2,000 | $3,000 |
| Institutional income cap (300% of FBR) | $2,982/mo | n/a |
| Community spouse resource allowance | $32,532 minimum | $162,660 maximum |
| Minimum monthly maintenance needs allowance (eff. 7/1/26) | $2,705/mo | n/a |
| Maximum monthly maintenance needs allowance | $4,066.50/mo | n/a |
| Home equity limit | $752,000 minimum | $1,130,000 maximum |
The CPI increase CMS applied for 2026 was 3.0%. Alaska and Hawaii run higher maintenance allowances, at $3,381.25 and $3,111.25 respectively.
The Asset Test: What Counts and What Does Not
The $2,000 figure sounds brutal until you see what is excluded. “Countable resources” means liquid or convertible assets: checking and savings, CDs, brokerage accounts, cash value in some life insurance, and real estate that is not your home.
Excluded, in the standard SSI rules most states use:
- Your home, as long as your equity is under the state’s limit, which for 2026 is between $752,000 and $1,130,000. Most states use the $752,000 floor. The equity limit does not apply at all if a spouse or a child who is under 21, blind or disabled lives in the home, under 42 U.S.C. 1396p(f)(2).
- One vehicle, excluded entirely regardless of value if it is used for transportation for you or a household member, under 20 CFR 416.1218.
- Household goods and personal effects, including furniture, clothing and a wedding ring.
- Burial spaces for you and immediate family, with no dollar cap, plus up to $1,500 in funds specifically set aside for burial under 20 CFR 416.1231. The burial fund has to be kept in a separate account and clearly designated, or the exclusion is lost entirely. An irrevocable burial contract is treated differently and reduces that $1,500 allowance.
That gap between “everything you own” and “countable resources” is where legal spend down happens. Paying off a mortgage or credit card, replacing a failing roof, buying a reliable car, prepaying a funeral, or paying a home care aide are all ways of converting countable dollars into excluded ones.
What does not work is giving money to your children. Every transfer for less than fair market value in the 60 months before application triggers a penalty, and our guide to the Medicaid look-back period walks through how those penalties are computed and how brutal the timing is.
One warning about 2028. The 2025 reconciliation law amended 42 U.S.C. 1396p(f) to cap the home equity limit at $1,000,000 starting January 1, 2028, with no further inflation adjustment. KFF notes that will lower the limit in the 11 states currently using the federal maximum and will reinstate an equity limit in California, which does not apply one today.
The Income Test: Two Completely Different Systems
This is where the country splits in half, and where the advice you find online is most likely to be wrong for your state.
Income cap states use the “special income rule,” which sets a hard ceiling at 300% of the SSI federal benefit rate. For 2026 that is $2,982 a month. KFF counts 41 states using this rule for both institutional and home-based care, plus Massachusetts for home care only. In these states, income of $2,983 disqualifies you outright, no matter how large your nursing home bill is. The fix is a qualified income trust, which reroutes the excess income through a dedicated account rather than reducing it.
Medically needy states let you spend down income instead. You subtract incurred medical expenses from your monthly income until you fall under a “medically needy income level,” and then you are covered for the rest of a budget period the state sets at somewhere between one and six months, per CMS guidance in State Health Official letter 14-002. KFF counted 34 states with a medically needy pathway in 2026, 32 of which extend it to older adults and people with disabilities. The median medically needy income level rose from $511 a month in 2025 to $563 in 2026, so these limits are far below the income cap and often below SSI.
Some states run both, which is why the same person can face very different math after moving across a state line.
What the Spouse at Home Keeps
Congress built spousal impoverishment protections in 1988 specifically so the healthy spouse is not left destitute. Two separate allowances apply.
Resources. At application, the couple’s combined countable resources get a snapshot. The community spouse keeps a community spouse resource allowance, which for 2026 is at least $32,532 and no more than $162,660. States pick a formula inside that band, so some states protect half the couple’s assets up to the maximum while others protect the maximum outright.
Income. The spouse in the facility can divert income to the spouse at home to bring that spouse up to a minimum monthly maintenance needs allowance. For 2026 that floor is $2,705 a month effective July 1, 2026, with a ceiling of $4,066.50. A separate community spouse housing allowance of $811.50 feeds the excess shelter calculation that can push the allowance above the floor.
The community spouse’s own income is not counted toward the applicant’s eligibility. Only the applicant’s income matters for the income test.
Share of Cost: What Happens After You Qualify
Approval does not mean Medicaid pays the whole bill. Under 42 CFR 435.725, once you are eligible, nearly all of your monthly income is applied to the cost of your care through what states call share of cost, patient liability, or patient pay amount. Medicaid pays the difference.
The regulation protects deductions in a fixed order:
- A personal needs allowance of at least $30 a month. States can and do go higher. KFF found the 2026 median at $70 for institutional care, with 13 states raising theirs in 2026 and Washington jumping from $42 to $109.
- A spousal maintenance allowance and, where relevant, a family allowance for dependents at home.
- Health insurance premiums, deductibles and coinsurance, including Medicare premiums. If you have not already checked whether you qualify for a Medicare Savings Program or Extra Help, do that first.
- Necessary medical care not covered by Medicaid, subject to reasonable state limits.
Whatever is left goes to the facility. For someone with a $2,400 Social Security check and a $70 personal needs allowance and no spouse at home, that is roughly $2,330 a month out the door, with Medicaid picking up the rest of a bill that our nursing home cost guide shows commonly runs four to five figures higher.
Where State Rules Diverge Most
Three variations matter enough to check before you plan anything.
209(b) states. Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North Dakota and Virginia use an option under section 209(b) of the 1972 Social Security Amendments that lets them apply financial rules different from SSI, as long as they are no more restrictive than the rules that state had in place in 1972. In practice that means a different income or resource standard than the $994 and $2,000 figures above.
California. Medi-Cal eliminated its asset test in January 2024, then reinstated one on January 1, 2026 to close a budget gap. The limit is $130,000 for one person and $195,000 for a couple, rising $65,000 for each additional household member up to ten, and DHCS has published it as effective through June 30, 2027. California also uses a 30-month look-back rather than the federal 60 months, and it applies no home equity limit at all.
Medicare Savings Program limits are separate. The 2026 MSP resource standard is $9,950 for a single person and $14,910 for a married person, which is five times the full-Medicaid resource limit. Plenty of people who cannot qualify for full Medicaid can still get their Part B premium paid.
The Bottom Line
Spend down is not a strategy you improvise. The asset side is mostly about converting countable dollars into excluded ones before you apply, and the income side depends entirely on whether your state uses an income cap or a medically needy pathway.
Two rules cause almost all the damage. Gifting assets to family triggers the transfer penalty described in the look-back guide. Sitting above the income cap without setting up a qualified income trust in a state that requires one produces an outright denial rather than a partial benefit.
If you are still paying privately while you sort this out, the tactics in our guide to paying for a nursing home and to medical bill assistance programs cover the gap. And if the concern is what happens to the house afterward, that is a separate rule set, covered in Medicaid estate recovery.
All figures above are the 2026 standards published as of September 2026. CMS updates the SSI and spousal impoverishment chart each January, and adjusts the minimum monthly maintenance needs allowance every July 1.