Passing Medicaid’s income test is only the beginning. Applicants must also satisfy an asset test.
A retiree could receive less than the $2,982 monthly income benchmark but still be ineligible because of savings, investments or other countable property. Conversely, someone with little savings but income exceeding $2,982 may need an approved income-planning solution.
Medicaid examines more than cash
Medicaid does not review only cash and savings accounts. It generally requires applicants to disclose all financial interests.
Common countable assets include:
- Checking and savings accounts
- Certificates of deposit
- Money-market accounts
- Stocks, bonds and mutual funds
- Brokerage accounts
- Cryptocurrency
- Second homes and vacation properties
- Rental and investment real estate
- Additional vehicles
- Cash value in certain life-insurance policies
- Revocable living trusts
- Promissory notes and private loans
- Business ownership interests
- Some retirement accounts
- Existing annuities
Moving $100,000 from a savings account into stocks does not protect it. Both are normally countable financial resources.
For married applicants, moving money from the nursing-home spouse’s account into the healthy spouse’s account also does not necessarily protect it. Medicaid generally reviews countable assets owned by either spouse when determining initial eligibility.
Which assets may be exempt?
Depending on state rules, potentially exempt assets include:
- A primary residence when a spouse or another qualifying person lives there
- One automobile
- Household furnishings
- Personal belongings
- Certain prepaid burial arrangements
- Limited life-insurance policies
- Certain income-producing property
- Some retirement accounts
- Properly established special-needs trusts
For 2026, states generally apply a home-equity limit between $752,000 and $1,130,000, although important exceptions may apply when a spouse or another protected person continues living in the home.
An exempt asset is not always permanently protected. For example, a home may be excluded during eligibility but later become subject to Medicaid estate-recovery rules.
Asset limit for a single applicant
A single nursing-home Medicaid applicant may commonly retain only about $2,000 in countable resources, although the actual limit depends on the state.
The applicant may retain exempt property, but most monthly income must generally be contributed toward nursing-home care after approved deductions.
A single person should not give excess savings to children without obtaining legal advice. Gifts made during Medicaid’s five-year lookback can produce a period during which Medicaid will not pay for nursing-home care.
Asset protection for married couples
When one spouse enters a nursing home and the other remains at home, the community spouse receives additional protection.
The 2026 federal Community Spouse Resource Allowance standards are:
| 2026 standard | Amount |
|---|---|
| Minimum resource allowance | $32,532 |
| Maximum resource allowance | $162,660 |
| Typical institutionalized-spouse allowance | Often $2,000, subject to state rules |
The community spouse does not automatically receive the $162,660 maximum.
In many states, Medicaid examines the couple’s countable resources on a financial “snapshot date,” generally connected to the beginning of a continuous institutional stay. The community spouse may retain approximately one-half of the countable resources, subject to the minimum and maximum limits.
Example: A couple with $300,000
Robert enters a nursing home while Linda remains in their home. Their countable assets total $300,000.
A simplified calculation might be:
- Linda’s allowance: approximately $150,000
- Robert’s allowance: approximately $2,000
- Potential excess assets: approximately $148,000
The couple may need to spend or legally convert the excess before Robert qualifies for Medicaid.
Permitted expenditures might include:
- Paying debts
- Making necessary home repairs
- Replacing an older automobile
- Purchasing household or medical equipment
- Arranging permitted prepaid funeral services
- Paying medical and legal expenses
- Purchasing a properly structured Medicaid-compliant annuity
Rules vary, so families should not spend or transfer money without understanding how their state will treat the transaction.
Medicaid’s five-year lookback
Medicaid reviews many transfers made during the 60 months preceding a long-term-care application.
Potentially penalized transactions include:
- Giving money to children or grandchildren
- Adding someone to an account and allowing that person to withdraw funds
- Transferring a home for less than fair market value
- Selling property at a substantial discount
- Forgiving a family loan
- Transferring assets into an unsuitable trust
- Purchasing a noncompliant annuity
A transfer penalty is not calculated from the date of the gift alone. Under federal rules, the resulting period of ineligibility may begin when the applicant is otherwise eligible and needs Medicaid to pay for care. That can create a serious coverage gap.
Retirement accounts require special attention
IRAs, 401(k)s and similar retirement accounts are not treated identically in every state.
Their treatment may depend on:
- Whether the account belongs to the applicant or spouse
- Whether it is in payout status
- Whether required distributions have started
- Whether the principal is accessible
- Whether the state counts the account as a resource
Even if the account receives favorable asset treatment, its monthly distributions may still count as income.
The bottom line
Medicaid looks beyond cash in a savings account. Investments, property, trusts, retirement accounts, annuities and other financial interests may all be reviewed.
For married couples, the 2026 federal community-spouse protection ranges from $32,532 to $162,660. For a single applicant, the countable-resource limit is often approximately $2,000, although state rules vary.
Before transferring assets, families should obtain a complete financial review from an elder-law attorney familiar with their state’s Medicaid program.
-Phan Hoàng Anh-
Sources: Medicaid spousal-impoverishment protections, 2026 federal standards, and federal transfer and annuity rules.
The article above is for general educational purposes and do not constitute legal, tax, insurance or financial advice.