Medicaid Spend Down Calculator

Medicaid Spend Down Calculator

How Medicaid Spend-Down Works

Exempt vs. Countable Assets

Understanding which assets Medicaid counts is the first step in planning.

Medicaid Rules by State

Select your state for asset limits, income rules, penalty divisors, and state-specific guidance.

Frequently Asked Questions

What is a Medicaid spend-down?

A Medicaid spend-down is the process of reducing countable assets below your state's Medicaid asset limit so you can qualify for Medicaid coverage of nursing home care. Most states require single applicants to have $2,000 or less in countable assets. Married couples have additional protections through the Community Spouse Resource Allowance (CSRA).

What assets are exempt from Medicaid spend-down?

Common exempt assets include: the primary home (if you intend to return or your spouse lives there), one vehicle of any value, irrevocable prepaid burial and funeral contracts (up to $10,000–$15,000), personal belongings and household goods, life insurance with a face value under $1,500, and term life insurance. Retirement accounts (IRAs, 401ks) may be exempt in some states if in payout status.

How is the Community Spouse Resource Allowance calculated?

The CSRA protects a portion of joint assets for the spouse who stays at home (the community spouse). In 2025, it equals 50% of joint countable assets, with a minimum of $30,828 and a maximum of $154,140. So if a couple has $200,000 in joint countable assets, the community spouse keeps $100,000. The institutionalized spouse must then spend down their remaining assets to the state limit (typically $2,000).

What is a transfer penalty and how is it calculated?

If you transferred assets for less than fair market value within the past 60 months (5 years), Medicaid imposes a penalty period — months during which Medicaid will not pay for nursing home care. The penalty equals the amount transferred divided by the state's average monthly private-pay nursing home cost (the 'penalty divisor'). For example, if you gave away $70,000 and the state divisor is $7,000/month, the penalty is 10 months.

What is a Miller Trust (Qualified Income Trust)?

A Miller Trust is required in 'income cap' states when a Medicaid applicant's monthly income exceeds 300% of the federal SSI benefit rate ($2,901 in 2025). The applicant deposits their income into the trust each month; the trust pays the nursing home and Medicaid pays the balance. Without a Miller Trust, an applicant over the income cap cannot qualify in income cap states regardless of assets.

What is the Medicaid look-back period?

The look-back period is the 60 months (5 years) before a Medicaid application during which all asset transfers are reviewed. Any gift or below-market transfer during this period can trigger a penalty. The look-back period for community (home) Medicaid is different — it begins when HCBS (home and community-based services) are first approved.

What is the difference between an income cap state and a medically needy state?

Income cap states (such as Texas, Florida, and Georgia) require a Miller Trust if income exceeds the cap ($2,901/mo in 2025). Income cannot be 'spent down.' Medically needy states (such as California, New York, and Illinois) allow applicants with excess income to qualify by contributing the excess monthly toward nursing home costs — this monthly contribution is the income 'spend-down.'

What allowable expenses can I spend down on?

Allowable spend-down expenses include: medical bills (dental, vision, hearing aids, prescriptions), home modifications for accessibility (ramps, grab bars, stairlifts), pre-paying nursing home costs, irrevocable funeral and burial arrangements, legal fees for Medicaid planning, and paying off legitimate debts. You should not spend down on gifts to family members during the lookback period — this creates a penalty.

Can a married couple protect the home from Medicaid?

Yes — the home is fully exempt during the community spouse's lifetime. The state cannot force a sale while the spouse lives in the home. However, after both spouses pass away, the state may file an estate recovery claim to recoup Medicaid costs from the home's value. Strategies such as a life estate deed or irrevocable Medicaid asset protection trust (MAPT) — set up more than 5 years before application — can prevent estate recovery.

How far in advance should I plan for Medicaid?

Ideally 5+ years before needing nursing home care, since transfers outside the 60-month lookback period do not trigger penalties. However, even with urgent planning (the person is already in a nursing home), strategies such as Medicaid-compliant annuities, caretaker child exceptions, and spousal refusal can dramatically reduce the spend-down period. Never assume it's too late — consult an elder law attorney.