When a nursing home costs more than most incomes, families turn to Medicaid – and quickly discover that long-term-care Medicaid has its own, stricter rulebook. It weighs your income, your assets, and whether you medically need that level of care. Here is how eligibility really works in 2026, and where your state fills in the numbers.
Quick answer
Long-term-care (LTC) Medicaid – for nursing homes and many in-home services – looks at three things: your income, your countable assets, and a medical need for that level of care. The tests are stricter than regular (MAGI) Medicaid. A common individual asset limit is about $2,000, mirroring the federal SSI resource limit. In “income-cap” states, the income standard is 300% of the SSI federal benefit rate – with the 2026 rate of $994, that works out to about $2,982 a month (a derived figure, and only some states use it). A five-year look-back reviews past gifts, and your home is usually exempt up to an equity limit. Exact dollar figures vary by state.
Key takeaways
- LTC Medicaid combines an income test, an asset test, and a level-of-care requirement.
- The individual asset limit is commonly about $2,000, tied to the SSI resource limit – but states vary.
- Income-cap states use 300% of the SSI federal benefit rate; with 2026’s $994 rate that derives to roughly $2,982/month (applicability and figure vary by state).
- A 60-month (5-year) look-back on asset transfers can create a penalty period of ineligibility.
- Your home is generally exempt up to a home-equity limit ($500,000 floor, state option up to $750,000, inflation-adjusted).
- Once eligible, most of your income goes to care, minus a personal-needs allowance (federal minimum $30/month) and protections for a spouse who stays home.
How LTC Medicaid differs from regular Medicaid
Most working-age adults and children qualify for Medicaid through “MAGI” rules that look only at income. Long-term-care Medicaid is different: it applies an asset test as well as an income test, and it requires a functional (medical) assessment showing you need a nursing-facility level of care – help with daily activities such as bathing, dressing, eating, or managing serious health needs. Medicaid.gov notes that eligibility for people in an institution “may be figured differently,” and access can be tied to the need for an institutional level of care.
The income test
States take one of two broad approaches. Income-cap states set a hard ceiling equal to 300% of the SSI federal benefit rate (FBR). The 2026 FBR is a verified $994 per month for an individual, so 300% derives to about $2,982 per month. Treat that as a calculated figure, not an officially published one, and confirm whether your state uses the 300% cap. Medically needy states instead let you “spend down” income above a threshold on medical and care costs to qualify.
Being over the income cap is not necessarily the end. Many income-cap states let applicants use a Qualified Income Trust (also called a Miller Trust) to direct excess income and still qualify. The mechanics are state-specific.
The asset test
LTC Medicaid divides what you own into countable and exempt assets. Countable assets (cash, bank accounts, most investments) generally must fall at or below the state’s limit – commonly about $2,000 for an individual, mirroring the SSI resource limit that SSA sets at $2,000 for an individual and $3,000 for a couple. Some states use higher figures, so verify yours.
Many assets do not count. Under SSI rules that most states follow, the home you live in, one vehicle, household goods and personal effects, and certain burial funds are excluded. Careful, lawful planning around exempt assets is common, but transfers can trigger the look-back below.
Your home and the equity limit
Your primary home is usually exempt while you live there, intend to return, or a spouse or dependent relative lives there. But federal law caps how much home equity you can have and still qualify for LTC Medicaid. The statutory floor is $500,000, and a state may raise it up to $750,000; both figures are adjusted for inflation each year since 2011, so the current dollar amounts are higher. The home-equity limit does not apply if a spouse, or a child under 21 or a blind or disabled child, lawfully lives in the home. A reverse mortgage or home-equity loan can be used to reduce equity, and states must offer a hardship waiver.
The 5-year look-back
When you apply, the state reviews asset transfers made in the 60 months (five years) before your application. Gifts or below-market transfers during that window can create a penalty period – a stretch of time when Medicaid will not pay for your care, roughly proportional to the amount transferred divided by the average private-pay cost of care in your state. This is why last-minute giving away of assets often backfires; plan early and get advice.
What you pay once you qualify
Approval does not mean care is free. Under federal rules (42 CFR 435.725), a nursing-home resident applies almost all of their income toward the cost of care – the “patient-pay amount” or “share of cost” – after certain deductions. Those deductions include:
- A personal-needs allowance – a small monthly amount kept for personal items. The federal minimum is at least $30/month for an individual (and $60 for a couple who are both institutionalized); many states set a higher amount.
- A maintenance allowance for a spouse or family living at home.
- Uncovered medical costs, including Medicare and other health-insurance premiums.
- An optional home-maintenance allowance for up to six months if a doctor certifies you are likely to return home.
Protections for a spouse who stays home
Special “spousal impoverishment” rules protect a husband or wife who remains in the community when their partner enters care. These rules let the at-home spouse keep a portion of the couple’s income and assets so they are not left destitute. The protected amounts are set annually and vary by state, so ask your state Medicaid agency for the current community-spouse figures rather than relying on a rule of thumb.
2026 anchors and where they come from
| Item | 2026 figure | Source / note |
|---|---|---|
| SSI federal benefit rate (individual) | $994 / month | SSA – verified |
| Income-cap standard (300% of SSI FBR) | about $2,982 / month | Derived (300% x $994); income-cap states only |
| SSI resource limit (individual / couple) | $2,000 / $3,000 | SSA – verified; many states mirror for LTC asset test |
| Home-equity limit | $500,000 floor; state option up to $750,000 | 42 U.S.C. 1396p(f); inflation-adjusted since 2011 |
| Asset-transfer look-back | 60 months (5 years) | 42 U.S.C. 1396p(c) – verified |
| Personal-needs allowance (minimum) | at least $30 / month | 42 CFR 435.725 – verified; states often set higher |
Why your state matters
Medicaid is federal-state, and the numbers that decide your case are largely state-set: the exact asset limit, whether your state is income-cap or medically needy, the current home-equity limit, your state’s personal-needs allowance, and the spousal-impoverishment figures. The federal rules here are the framework; the deciding dollar amounts come from your state. Confirm them before you move money or a home.
Official sources
- Medicaid.gov – Institutional Long Term Care
- Medicaid.gov – Eligibility
- SSA – SSI Federal Payment Amounts (FBR)
- SSA – SSI Resources ($2,000 / $3,000 limit)
- 42 CFR 435.725 – Post-eligibility (patient-pay) rules
- 42 U.S.C. 1396p – look-back and home-equity limits
Next steps
- Ask your state Medicaid agency whether it is an income-cap or medically needy state, and get the current asset limit and income standard in writing.
- If income is above the cap, ask about a Qualified Income (Miller) Trust.
- Request the current home-equity limit, personal-needs allowance, and community-spouse figures for your state.
- Before gifting or transferring assets, consult an elder-law attorney – the five-year look-back can create penalties.
Related guides
- Medicaid for Seniors 2026
- Medicaid Asset Limits 2026
- Medicaid Spend-Down Programs
- Medicare vs. Medicaid
Frequently asked questions
What is the asset limit for nursing-home Medicaid?
For an individual it is commonly about $2,000 in countable assets, mirroring the federal SSI resource limit ($2,000 individual, $3,000 couple). But states vary – some use higher limits or different rules for certain pathways – so confirm the figure with your state Medicaid agency. Many assets, including your home, one vehicle, and personal effects, do not count.
Will Medicaid count my house?
Usually your primary home is exempt while you live there, intend to return, or a spouse or dependent relative lives there – subject to a home-equity limit ($500,000 floor, up to $750,000 by state option, inflation-adjusted). Keep in mind the home may later be subject to Medicaid estate recovery after death.
What is the five-year look-back?
When you apply, the state reviews asset transfers made in the 60 months before your application. Gifts or below-market sales in that window can create a penalty period during which Medicaid will not pay for your care. Planning early, with legal advice, helps avoid surprises.
I am over the income limit – can I still qualify?
Possibly. In income-cap states the standard is 300% of the SSI rate (about $2,982/month in 2026, a derived figure), and many of those states let you use a Qualified Income (Miller) Trust to still qualify. Medically needy states instead let you spend down income above a threshold on care.
How much of my income do I keep in a nursing home?
Most of your income goes toward the cost of care. You keep a personal-needs allowance – a federal minimum of at least $30 a month, though states often set it higher – plus protected amounts for a spouse or family at home and deductions for uncovered medical costs such as Medicare premiums.
Last verified against official sources on September 1, 2026. This is general information, not personalized advice, and has not been independently reviewed by an outside subject-matter expert. Confirm current details with the agency before acting.