Medicaid Spend-Down Calculator
The assets, the income, and any gifts in the last five years
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Educational estimate only. Confirm the assumptions, current rules, fees, and rounding that apply to your situation before making a decision.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter countable assets: bank accounts, investments, a second property and cash value in life insurance. The home you live in, one car and personal belongings are normally not counted. The example uses $120,000.
- 02
Say whether a spouse will still be living at home, with 1 or 0, and enter their own monthly income. A community spouse is allowed to keep a share of the assets and some of the applicant's income, and the answer changes completely without one.
- 03
Enter any gifts or transfers for less than fair value made in the last five years — money to children, a property signed over, a forgiven loan — and your state's monthly penalty divisor, which is the average private-pay nursing home cost it publishes.
- 04
Check the state-set figures and change any that differ where you live: the countable asset limit, commonly $2,000, and the monthly personal needs allowance. Every one of them varies by state, which is why they are all editable.
- 05
Read the amount that has to be spent down, the months of ineligibility any gift creates, and the table showing where each part of the assets goes. Then take the result to your state Medicaid agency and an elder-law attorney, who are the people who decide the real answer.
Formula
Assets. The community spouse resource allowance = half the countable assets, held between the federal minimum of $32,532 and the federal maximum of $162,660 for 2026, and never more than the assets that exist. With no spouse at home it is zero. Amount to spend down = countable assets − the community spouse resource allowance − the applicant's countable asset limit, and never below zero. Months of private-pay care the spend-down would buy = the amount to spend down divided by the monthly private-pay cost. Transfers. Penalty period in months = the value of gifts made in the 60-month look-back divided by the state's monthly penalty divisor, which is its published average private-pay nursing home cost. The period begins on the later of the transfer date or the date the applicant is institutionalized, has spent down and would otherwise be eligible. Income. The spouse's income allowance = the minimum monthly maintenance needs allowance − the community spouse's own income, never below zero. The amount actually diverted is limited by the applicant's income after the personal needs allowance. Income to the facility = the applicant's monthly income − the personal needs allowance − the amount diverted to the spouse, never below zero. Every figure above is set or administered by a state within federal limits.
Example
A married couple has $120,000 in countable assets. One of them needs nursing home care; the other stays at home with $1,200 a month of their own income. The applicant has $2,800 a month of income. Three years ago they gave $60,000 to their children. Their state uses a $2,000 asset limit, a $50 personal needs allowance and a $10,000 monthly penalty divisor. On assets, the spouse at home keeps half of $120,000, which is $60,000 — inside the 2026 range of $32,532 to $162,660, so it is protected in full. The applicant keeps $2,000. That leaves $58,000 to be spent down, about 5.8 months of private-pay care at $10,000 a month. The $60,000 gift is inside the five-year look-back. Divided by the $10,000 divisor it creates 6 months of ineligibility, and those months do not begin until the applicant is in care and has spent down — so roughly $60,000 of care has to be paid for from somewhere else at exactly the wrong moment. On income, the applicant keeps $50 for personal needs. Their spouse's $1,200 is topped up to the $2,705 minimum monthly maintenance needs allowance, so $1,505 is diverted to them and they live on $2,705. The remaining $1,245 a month goes to the facility as the share of cost. Had the couple not made the gift, the same $120,000 would still have left $58,000 to spend down, but with no penalty period attached to it.
Definitions
- Countable assets
- The resources a state counts when deciding eligibility: bank accounts, investments, a second property and cash value in life insurance. The home you live in, one car and personal belongings are normally excluded.
- Look-back period
- The 60 months before an application, during which every transfer for less than fair market value is reviewed (42 U.S.C. 1396p(c)). A gift inside it creates a penalty period.
- Penalty divisor
- The average monthly cost of private-pay nursing facility care that a state publishes and uses to convert a gift into months of ineligibility. It differs widely between states.
- Community spouse resource allowance
- The share of a couple's countable assets the spouse remaining at home may keep: half the total, between $32,532 and $162,660 for 2026 (CMS).
- Minimum monthly maintenance needs allowance
- The monthly income floor for a spouse still at home, made up of their own income plus a diverted share of the applicant's. It is $2,705 for the 48 contiguous states and DC from 1 July 2026, and a state may allow up to $4,066.50.
Good to know
Where Medicare stops and long-term care begins
The most consequential misunderstanding in American retirement planning is the belief that Medicare pays for a nursing home. It does not, and the distinction it draws is precise. Medicare covers skilled care: treatment that requires a nurse or a therapist, following a qualifying hospital admission, for a limited period. In 2026 it pays in full for the first 20 days of a skilled nursing facility stay and then charges $217 a day for days 21 through 100, after which it pays nothing. What Medicare does not cover at any point is custodial care — help with dressing, bathing, eating, moving and remembering medication. Custodial care is not medical treatment, and it is precisely what most people need when they can no longer live independently, often for years rather than weeks. The result is a gap that no amount of Medicare coverage closes. Three things fill it in practice. The first is paying privately, at costs that commonly run to several thousand dollars a month and in many states considerably more; the penalty divisor on this page, which reflects a state's average private-pay nursing home cost, is a reasonable proxy for the scale. The second is long-term care insurance, bought years in advance while the buyer is healthy enough to be underwritten. The third, and the one most people eventually reach, is Medicaid, which is the largest payer for long-term care in the United States. Medicaid is not Medicare. It is a joint federal and state programme with financial eligibility rules, which means it pays only after an applicant's own countable resources have been reduced to a low limit — commonly $2,000 for one person, the 2026 SSI resource standard. That requirement is what the phrase 'spend-down' describes, and it is why a calculator like this one exists. Most people arrive at these rules during a crisis, shortly after a hospital discharge, with days rather than months to understand them. Reading them while nothing is happening is by far the better time, because several of the rules reach five years into the past and cannot be undone once that window has begun.
The five-year look-back and the penalty it creates
Because Medicaid pays only for people whose resources are low, federal law tries to prevent people from becoming eligible by giving their money away. When you apply for long-term care Medicaid, the state reviews every transfer made for less than fair market value in the 60 months beforehand. This is the look-back, set out in 42 U.S.C. 1396p(c), and it is genuinely five years: a gift made four years and eleven months ago is inside it. The consequence of a transfer inside the window is not a fine and not a refusal. It is a penalty period, a stretch of time during which the applicant is otherwise eligible but Medicaid will not pay. Its length is the value transferred divided by the state's monthly penalty divisor, which is the average monthly cost to a private patient of nursing facility services in that state. In the example on this page, $60,000 of gifts divided by a $10,000 divisor produces 6 months of ineligibility. What makes the rule severe is not the formula but the timing. The penalty does not begin on the day of the gift, quietly expiring while the person is still healthy. It begins on the later of the transfer date or the date the applicant is in care, has spent down to the asset limit and would otherwise qualify. The uncovered months therefore arrive at the worst possible moment: the money has already been given away, the care is already needed, and roughly $60,000 of it must be paid from somewhere else. One misconception deserves direct correction, because it causes real harm. The annual gift tax exclusion that lets a person give thousands of dollars a year to each of several people without filing a tax return has nothing whatever to do with Medicaid. Those are federal tax rules; this is a benefits eligibility rule, and the two are unconnected. A gift that is entirely invisible to the IRS is fully visible to a state Medicaid agency. Some transfers are exempt — to a spouse, or of a home to certain family members who lived there and provided care — but the exemptions are narrow and the state decides whether one applies.
How the rules protect a spouse who is still at home
If every dollar had to be spent before Medicaid paid for one partner's care, the other would be left destitute. Congress recognised this and built the spousal impoverishment rules, which protect the spouse remaining in the community, and they are the most generous part of the whole scheme. They work on two fronts. On assets, the community spouse keeps half of the couple's countable resources, subject to a floor and a ceiling that CMS updates each January. For 2026 the minimum is $32,532 and the maximum is $162,660. In this page's example a couple with $120,000 in countable assets protects half of it, $60,000, which sits comfortably inside that range; a couple with $400,000 would protect $162,660 rather than $200,000, because the ceiling binds. The floor matters just as much at the other end, because a couple with $40,000 protects $32,532 rather than half. On income, the protection works differently and is often overlooked. The spouse at home keeps their own income in full, and if it falls below a monthly floor, income belonging to the spouse in care is diverted to bring them up to it. That floor is the minimum monthly maintenance needs allowance, $2,705 a month for the 48 contiguous states and the District of Columbia from 1 July 2026, with higher figures for Alaska and Hawaii. In the example the community spouse's own income is $1,200, so $1,505 of the applicant's income is diverted to them and they live on $2,705. The applicant keeps a personal needs allowance — $50 in the example, though federal law requires only $30 a month for an aged, blind or disabled resident — and the remaining $1,245 goes to the facility as the share of cost, with Medicaid paying the difference. Two refinements are worth knowing. A state may allow a maintenance allowance above the minimum, up to $4,066.50 for 2026. And a spouse who genuinely cannot manage on the standard figure, typically because of high housing costs, can ask for an increase through a fair hearing.
Who actually decides, and when to get help
Everything on this page is arithmetic performed on figures you supplied, and it is important to be clear about what that can and cannot tell you. Medicaid is administered by the states within a federal framework, and the variation between them is not marginal. The countable asset limit, the personal needs allowance, the penalty divisor, whether income is handled through a limit or a share-of-cost calculation, and the treatment of trusts and annuities all differ from one state to the next. Even the look-back, which is 60 months under federal law, is applied differently in at least one state, and at least one state has removed the asset test altogether for some eligibility groups. The home equity limit is set by each state within a federal range, running from $752,000 to $1,130,000 for 2026. This is why every figure on this page is an editable field rather than a fixed constant: the defaults are a starting point, and the numbers that govern your case are your state's. Two parties decide the real answer, and neither is a website. The first is your state Medicaid agency, which makes the eligibility determination, applies the look-back and calculates any penalty period. The second is an elder-law attorney, who is the person to consult before any transfer is made rather than afterwards. That sequence matters more than anything else written here. Many of the choices in this area are irreversible in practice: a gift made to a child on the strength of a calculator, or of advice from a friend who went through it in another state, can create months or years of ineligibility that nobody can undo, arriving exactly when care is needed and the money is gone. There are lawful planning routes — certain trusts, particular annuity structures, transfers that fall within the statutory exemptions — but each is technical, each depends on state law, and each can fail badly if done slightly wrong. If a nursing home admission is likely within five years, that is the moment to get advice, not after an application has been refused.
Frequently asked questions
How much do I have to spend down before Medicaid pays for a nursing home?
On this page's example, $58,000. Of $120,000 in countable assets, the spouse still at home keeps $60,000 and the applicant keeps the $2,000 asset limit, leaving $58,000 to be spent first. At a private-pay cost of $10,000 a month, that is about 5.8 months of care. The figures vary by state, which is why each one is an editable field.
What does spending down actually mean?
Spending the money on the applicant's own benefit, not giving it away. Paying for the care itself is the usual route, but paying off a mortgage or other debts, repairing the home, buying a reliable car, prepaying a funeral and buying exempt items generally count too. Giving assets away instead creates a penalty, which is the opposite of what people intend. The state decides what qualifies.
What is the five-year look-back?
When you apply, the state reviews every transfer made for less than fair market value in the 60 months beforehand, under 42 U.S.C. 1396p(c). A gift made four years ago still counts. The annual gift tax exclusion is irrelevant here: money you can give away without troubling the IRS is fully visible to Medicaid, and the two rules have nothing to do with each other.
How long is the penalty for a gift?
The value transferred divided by your state's monthly penalty divisor. In the example, $60,000 of gifts divided by a $10,000 divisor is 6 months of ineligibility. The timing is the cruel part: the penalty does not start on the day of the gift, but on the later of the transfer date or the date the applicant is in care, has spent down and would otherwise be eligible. So the uncovered months arrive exactly when the money is gone and the care is needed.
What can my spouse keep if I go into care?
The spousal impoverishment rules protect them. On assets, they keep half the countable total, never less than $32,532 and never more than $162,660 in 2026 — $60,000 in the example. On income, they keep their own and may be topped up to the minimum monthly maintenance needs allowance, $2,705 for the 48 contiguous states and DC from 1 July 2026. In the example their own $1,200 is topped up by $1,505 diverted from the applicant, so they live on $2,705.
What happens to my income once Medicaid pays?
Most of it still goes toward the care. In the example, $2,800 of monthly income keeps $50 as a personal needs allowance, diverts $1,505 to the spouse at home, and the remaining $1,245 goes to the facility as the share of cost, with Medicaid paying the difference. States set the personal needs allowance; federal law requires at least $30 a month for an aged, blind or disabled resident (42 CFR 435.725).
Will they take my house?
The home is usually not counted while you live there or intend to return, but two rules matter. Equity above the 2026 home equity limit makes it countable, and each state sets that limit within a federal range running from $752,000 to $1,130,000. Separately, estate recovery lets a state seek repayment from the estate afterwards. How both apply to a particular house is a question for your state Medicaid agency and an elder-law attorney, not for a calculator.