Paying for Care
Medicaid asset spend-down
Medicaid is the largest payer of long-term care in the US. Qualifying requires reducing 'countable' assets to roughly $2,000–$3,000 (single) or $148,620 (community spouse, 2026). Done right, your family keeps more than you think.
Updated 2026-02-27
Countable vs exempt assets
- Countable: bank accounts, stocks, second homes, life insurance with cash value over $1,500, retirement accounts (most states).
- Exempt while spouse is alive: primary home (up to $730,000 equity, varies by state), one car, household furnishings, irrevocable burial trust, term life insurance, personal effects.
- Community spouse resource allowance (CSRA): the well spouse keeps up to $148,620 in 2026. Maximum varies; minimum is $30,828.
Legal spend-down strategies
- Pay off debt — mortgage, credit cards, car loans.
- Home modifications — ramp, walk-in shower, stair lift, accessibility.
- Replace old vehicles (one allowed, no value cap).
- Pre-pay funeral costs into an irrevocable burial trust.
- Medicaid Compliant Annuity for the well spouse — converts countable asset to non-countable income stream.
- Pay caregiving family members through a properly-structured Personal Care Agreement.
- Spousal refusal (in some states like NY, FL) — community spouse refuses to contribute.
Document everything
- Every check, every receipt, every asset transfer.
- Keep records for 5+ years.
- Medicaid applications routinely audit. Sloppy paperwork costs months of coverage.
Frequently asked questions
- Can we just transfer the house?
- Sometimes — to a spouse, a disabled child, or a 'caretaker child' who lived in the home for 2+ years providing care. Otherwise, a transfer within 5 years creates a penalty. Talk to an elder-law attorney.
- Do we need an attorney?
- For any estate over $200K — yes. Attorney fees ($3,000-$8,000) are tiny compared to the assets a single mistake can disqualify.
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Memory Lane Care helps you understand what applies to your loved one, what to expect next, and which resources fit your family's situation.
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