Medicaid Long‑Term Care Eligibility Estimator

This Medicaid long-term care eligibility estimator is an educational tool to help you think through income and asset limits that often apply when someone seeks help paying for nursing home care or home- and community-based services (HCBS). It is not an official decision from your state Medicaid agency, but it can highlight whether you may need to reduce (“spend down”) income or assets to qualify.

How this Medicaid long-term care estimator works

The calculator compares three key financial inputs against limits you enter or accept as defaults:

• Monthly gross income – your income before taxes and other deductions.
• Countable assets – savings and property that Medicaid usually counts toward the asset limit.
• Home equity – the value of your primary home minus any mortgage debt, if you choose to include it.

You can then choose a state limit profile that loosely reflects how your state handles income for long-term care Medicaid:

• Income-cap state (typical) – Medicaid uses a relatively strict income cap; if your income is above the cap, you generally must use special tools (such as a Miller or Qualified Income Trust) to qualify.
• Income spend-down state (typical) – Medicaid may allow you to qualify even if your income is higher, as long as you spend the excess on medical and long-term care costs.

The default limits in the form are illustrative only. You can overwrite them with amounts that match your own state’s current rules if you know them.

Key formulas used in the estimator

The tool uses simple comparisons between what you enter and the limits you provide. In general terms:

• Income test: Your monthly income is compared to the monthly income limit.
• Asset test: Your countable assets are compared to the asset limit.
• Home equity test: If you enter home equity and a home equity cap, your equity is compared to that cap.

A basic eligibility check can be written as:

If any of these amounts are above the limits, the estimator will indicate that a spend-down or planning step is likely needed. A simple way to think about how much you would need to reduce is:

Positive values for excess income or excess assets indicate how far you are over the sample limits you entered.

Interpreting your estimated results

After you enter your numbers, the results will show whether your income, assets, and (optionally) home equity are above or below the limits. Here is how to read those outputs in general terms:

• All amounts within the limits: You may be financially within typical ranges for long-term care Medicaid in a state with similar rules, assuming you also meet all non-financial requirements. This is not a guarantee of approval.
• Income above the limit: In an income-cap state, you may need to explore tools such as a Miller or Qualified Income Trust. In a spend-down state, you may need to pay some of your income toward medical or long-term care costs before Medicaid pays the rest.
• Assets above the limit: You may need to reduce countable assets by paying for care, paying off debt, or using other legally allowed strategies. Improper gifts or transfers can trigger Medicaid penalties, so professional guidance is important.
• Home equity above the cap: Some states limit how much home equity you can have and still qualify for long-term care Medicaid. Exceeding the cap may affect eligibility, but there are many exceptions and protections, especially for a spouse still living in the home.

The estimator does not tell you what you should do with excess income or assets. Instead, it helps you see whether you are above or below common financial thresholds so you can ask more focused questions of your state Medicaid office or an elder-law professional.

Income-cap vs. income spend-down states

States generally fall into two broad categories for how they handle income in long-term care Medicaid programs. The profiles in the calculator are simplified versions of these approaches.

Worked example (illustrative only)

Imagine a single applicant living alone who enters the following values:

• Monthly gross income: $2,400
• Countable assets: $8,000
• Home equity: $100,000
• Monthly income limit: $2,829 (example income-cap value)
• Asset limit: $2,000
• Home equity cap: $750,000

The estimator will compare each value to the limit:

• Income ($2,400) is below the income limit ($2,829), so income may be within range for an income-cap program.
• Assets ($8,000) are above the asset limit ($2,000). Excess assets are $6,000.
• Home equity ($100,000) is below the example cap ($750,000).

In this example, the main financial barrier is excess countable assets. The estimator would likely show that asset spend-down or planning is needed, even though income and home equity are within the sample limits. The next real-world step for this person would be to talk with their state Medicaid office or a qualified professional before making any transfers or large financial moves.

What counts as income, assets, and home equity?

Because Medicaid rules vary by state, the following descriptions are only general guidelines. Your state may treat some items differently.

• Income often includes Social Security benefits, pensions, wages, annuity payments, and other regular payments you receive each month.
• Countable assets often include cash, checking and savings accounts, investments, most second vehicles, non-retirement brokerage accounts, and property that is not your primary residence.
• Common non-countable or limited-count assets can include a primary residence within certain equity limits, one vehicle, certain personal belongings, and specific types of retirement accounts or burial funds, depending on state rules.
• Home equity is typically the fair market value of your home minus mortgages or liens. Some states impose a maximum home equity amount for long-term care Medicaid, but many protections apply when a spouse or certain relatives live in the home.

The default limits in the form are generic examples. Always verify your own state’s current income, asset, and home equity rules through official state resources.

Assumptions and limitations of this estimator

This tool uses a simplified view of long-term care Medicaid financial rules. It is important to understand what it does not cover:

• Single applicant assumption: The estimator assumes one applicant and does not account for special protections for a spouse who stays in the community (the “community spouse”).
• Program differences: States may have different financial rules for nursing home coverage versus home- and community-based waiver programs. This tool does not distinguish between them.
• Exempt and partially exempt assets: The estimator treats all entered assets as countable. It does not model every category of exempt or partially exempt asset.
• Lookback and transfer penalties: The tool does not account for transfer-of-asset rules, lookback periods, or penalty calculations if you gave away assets or sold them for less than fair market value.
• Deductions and allowances: It does not include detailed deductions from income or allowances for dependents or a community spouse beyond the simple limits you enter.
• Changing rules: State Medicaid limits and rules change over time. The example limits in the form may not reflect current figures for your state.

Because of these limitations, you should treat the results as a starting point for conversations, not as a final eligibility decision.

Important disclaimer

This estimator is for general education and planning only. It does not provide legal, financial, or tax advice, and it does not determine whether you will be approved for Medicaid. Eligibility for Medicaid long-term care depends on detailed state rules, medical need, citizenship and residency, marital status, and many other factors.

Before making significant financial decisions or assuming you are eligible or ineligible, contact your state Medicaid agency or speak with a qualified elder-law attorney or benefits planner.

Common questions about Medicaid long-term care eligibility

Why do limits differ by state?

Medicaid is a joint federal–state program. Federal law sets broad guidelines, but each state designs its own long-term care programs within those guidelines. As a result, income caps, asset limits, home equity rules, and treatment of specific assets can vary widely.

Does this estimator replace advice from a professional?

No. The estimator gives a rough snapshot based on a few numbers you enter. Real eligibility decisions are made by your state Medicaid agency after a full review. An elder-law attorney or experienced benefits counselor can help you understand options that are not reflected in a simple calculator.

When should I seek one-on-one guidance?

You should consider talking with a professional if:

• You are over the income or asset limits shown in the estimator.
• You have a spouse, partner, or dependents who rely on you financially.
• You are thinking about giving away assets or changing ownership of property.
• You expect to need nursing home care or extensive home care in the near future.

A brief consultation can help you avoid costly mistakes and better understand how your state’s specific Medicaid rules apply to your situation.

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, L_I be the state income limit, and L_A 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

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.