Medicaid Long‑Term Care Eligibility Estimator
Estimate your potential eligibility for Medicaid long‑term care (nursing home or home‑ and community‑based services). Enter income and assets, choose a state limit profile, and see whether a spend‑down is likely needed.
Why Medicaid Matters for Long‑Term Care
Long‑term care is one of the largest financial risks in retirement. Even a few years of home care or nursing home care can cost hundreds of thousands of dollars. Medicare, despite being the primary health insurer for older Americans, generally covers only short‑term skilled care after hospitalization. It does not cover ongoing custodial help with daily living. That leaves Medicaid as the default payer for long‑term care for millions of people.
Medicaid is a needs‑based program. To qualify, you must meet strict income and asset limits. The logic is simple: Medicaid is intended for people who cannot reasonably pay for care themselves. The consequences, however, can be complicated. Many middle‑class retirees are surprised to learn that they are “too wealthy” to qualify, yet still not wealthy enough to self‑fund many years of care. Understanding eligibility rules early allows families to plan calmly rather than scrambling during a crisis.
This estimator provides a high‑level eligibility check. It does not replace state‑specific legal advice. Medicaid rules vary by state and by program type (institutional Medicaid vs home‑ and community‑based waivers). Still, the same basic concepts apply everywhere, and a simple model can tell you whether you are likely inside or outside the eligibility bands.
Two Separate Tests: Income and Assets
Medicaid long‑term care eligibility usually requires passing both:
- Income test. Monthly income must fall under a state limit. Some states are “income cap” states; others allow a spend‑down where excess income goes to medical costs.
- Asset (resource) test. Countable assets must be below a limit, typically around $2,000 for a single applicant, though amounts vary. Certain assets are exempt.
What Counts as a Countable Asset?
Countable assets generally include cash, checking and savings accounts, brokerage accounts, CDs, most retirement accounts, and non‑primary real estate. Exempt assets commonly include:
- Your primary residence up to a home‑equity cap (and sometimes fully exempt if a spouse remains at home).
- One vehicle used for transportation.
- Personal belongings and household goods.
- Certain funeral and burial arrangements.
Because exemptions are nuanced, this estimator asks for a conservative “countable assets” total and separately tracks home equity to compare to a typical cap.
The Eligibility Formulas
Let I be your monthly gross income, A be your countable assets, LI be the state income limit, and LA be the state asset limit. A simplified eligibility check is:
If either test fails, a spend‑down or planning step is needed. The spend‑down amount is the excess over the limit:
Worked Example
Elaine is a single retiree who may need nursing home care. She lives in a state where the income limit for long‑term care Medicaid is $2,829/month and the asset limit is $2,000. She receives $2,050/month from Social Security and a pension, and she has $38,000 in checking and savings plus $9,000 in a brokerage account. Her home equity is $120,000.
Income test: $2,050 is below $2,829, so she is income‑eligible.
Asset test: countable assets are $47,000. That exceeds $2,000, so she is not asset‑eligible. Required spend‑down is $47,000 − $2,000 = $45,000.
Elaine likely must spend down assets on care or other allowable expenses before qualifying. Planning ahead could preserve some value, but it must follow Medicaid rules and timing.
Allowable Spend‑Down Uses
Spend‑down does not mean “wasting money.” Medicaid allows certain expenditures that benefit the applicant:
- Paying for care services out of pocket.
- Home repairs and accessibility upgrades.
- Paying off debt.
- Purchasing a more reliable vehicle.
- Pre‑paying funeral and burial expenses.
Gifts and transfers to family are heavily restricted. Most states enforce a 5‑year “look‑back” period where transfers can create penalty months. If you are considering transfers, consult an elder‑law attorney.
Comparison Table: Typical Single‑Applicant Limits
| Limit Type | Typical Range (U.S.) | What It Means |
|---|---|---|
| Monthly income limit | $2,000–$3,000 | Income above this may require a trust or spend‑down |
| Countable asset limit | $2,000–$3,000 | Assets above this must be reduced |
| Home equity cap | $700k–$1M+ | Equity above cap can disqualify in some states |
Married Applicants and Spousal Protections
Medicaid rules are more generous when a spouse remains in the community (not in a facility). States allow the “community spouse” to keep a portion of assets—the Community Spouse Resource Allowance (CSRA)—and a certain income floor, the Minimum Monthly Maintenance Needs Allowance (MMMNA). The intent is to prevent a healthy spouse from being impoverished when the other spouse needs care. The practical takeaway is that married applicants often qualify with higher asset totals than single applicants. If you are married, treat the calculator as a conservative screen and expect higher real limits.
Look‑Back Period and Transfers
Most states enforce a five‑year look‑back on asset transfers. If you give away money or property for less than fair market value within that window, Medicaid may impose a penalty period during which it will not pay for long‑term care. The penalty is calculated by dividing the value of transfers by a state “divisor” representing average monthly nursing home cost. For example, a $60,000 gift in a state with a $10,000 divisor could create six penalty months. The rule is designed to deter last‑minute gifting, so planning should happen well before care is imminent.
Why Home Equity Still Matters
Even though a primary home is often exempt, very high equity can disqualify applicants in some states unless a spouse or dependent lives there. Homes can also be subject to Medicaid estate recovery after death, meaning the state may seek reimbursement from the estate. That does not automatically mean selling the home during life, but it does mean you should factor home equity into planning, especially if your goal is to leave the property to heirs.
Limitations and Assumptions
This estimator is intentionally simplified. It assumes:
- You are a single applicant. Married eligibility rules add spousal protections and different caps.
- Your income is stable and gross (before deductions).
- You have already separated “countable” vs “exempt” assets conservatively.
- State limits are approximated by profile; always verify current limits in your state.
Medicaid is a legal program with strict documentation requirements. Use this tool to gauge whether you are close to eligibility, then follow up with state resources or an elder‑law professional for a full assessment.