The Medicaid Spend-Down
Most people who need Long-Term Care Medicaid start with more savings or income than the limits allow. The spend-down is the process of getting under those limits in ways the rules allow. Done well, it pays for real needs, protects what can be protected and leads to eligibility as soon as possible. Done badly, it wastes money or causes a penalty. This section explains how it works.
Figures change periodically. Double-check current amounts before relying on them.
Two kinds of spend-down
| Kind | What it means |
|---|---|
| Asset spend-down | Reducing countable savings and property to the state’s asset limit, often $2,000 for a single person in 2026 |
| Income spend-down | In medically needy states, incurring medical bills equal to income above a set level each budget period (also called “share of cost”) |
The same person can face both.
The short version
- Spend excess assets on things that benefit the applicant (or the spouse) and are bought at fair market value.
- Giving money away is not a spend-down. Gifts within the 60-month look-back can cause a penalty period.
- Married couples can protect much more, through the spouse at home’s resource allowance.
- Keep receipts for everything. The state will ask.
- Plan before spending. A Certified Medicaid Planner (CMP) can show which purchases and strategies fit the state’s rules.
Guides in this section
| Guide | What it covers |
|---|---|
| How the spend-down works | The process, step by step |
| Allowed and not-allowed purchases | What counts as a valid spend-down |
| Income spend-down (share of cost) | How the medically needy spend-down works |
| Spend-down examples | Worked examples for singles and couples |
Related sections
Last updated for 2026. General information only, not legal or financial advice. Medicaid Answers is a free educational resource published by Medicaid Answers Foundation.