Medicaid Spend-Down Calculator for Long-Term Care

How Medicaid's asset test and spend-down actually work

Medicaid covers nursing home and other long-term care costs, but only once your countable assets fall below your state's limit. In most states, that limit is a federal default of just $2,000 for a single applicant, an amount that has not changed in decades and catches many middle-class families off guard.

"Countable" is the key word: your primary home (as long as a spouse or dependent still lives there), one vehicle, personal belongings, prepaid burial arrangements, and in most states term life insurance are generally exempt and should not be included in what you enter above. Cash, investment accounts, and additional real estate generally do count.

A handful of states diverge meaningfully from that federal default, and California is the most significant, well-documented example. California eliminated its Medicaid (Medi-Cal) asset test entirely from 2024 through 2025, but budget pressure led the state to reinstate a limit, effective January 1, 2026, of $130,000 for an individual applicant or $195,000 combined for a married couple, per California's own Department of Health Care Services trailer-bill documentation.

That reinstated limit is itself scheduled to phase down further, to $21,000 individual and $31,000 couple, starting July 1, 2027. Other states are reported to use limits somewhat higher than the $2,000 federal default as well, but we could not independently verify precise, current figures for every state during sourcing, so this calculator applies the federal default everywhere except California specifically.

Check your own state Medicaid agency or a local elder law attorney for your exact figure if you live outside California.

Marriage changes the math significantly, and deliberately so. Federal law protects a "community spouse" (the spouse who is not applying for Medicaid) from having to become impoverished just because their partner needs long-term care.

The Community Spouse Resource Allowance (CSRA) lets that spouse keep the greater of half the couple's combined countable assets or a federal minimum, currently $32,532 for 2026, up to a federal maximum of $162,660.

The applying spouse can then also keep their own individual limit on top of that. California's current asset-limit structure works a little differently, applying one combined household figure rather than a separate CSRA carve-out, though the underlying federal spousal-impoverishment protections still exist as a legal backstop.

Timing matters as much as the math. Medicaid reviews financial transactions made during a look-back period, 5 years in most states, before your application date. Any gifts or transfers made for less than fair value during that window, giving money to children, for example, rather than spending it on your own care, housing, or debts, can trigger a penalty period where Medicaid will not pay even once you are otherwise eligible.

Legitimate spend-down options include paying off debt, prepaying funeral expenses, home repairs or modifications, and paying for care directly; gifting assets away is generally the riskiest path and the one most likely to trigger a penalty.

This calculator is a simplified planning estimate, not legal or financial advice. Medicaid eligibility is governed by state-specific rules that change over time (as California's own recent history shows), so talk to a Medicaid caseworker or an elder law attorney before making decisions based on this number, especially before transferring or gifting any assets.