Medicaid and Married Couples: Protecting the Healthy Spouse’s Assets

A guide for seniors, families & caregivers — Updated 2026

When one spouse needs long-term care and must apply for Medicaid, it can feel like the entire family’s financial security is at risk. The good news is that federal law includes special protections designed specifically for married couples — so the healthy spouse at home doesn’t have to become impoverished. Understanding how these rules work can make an enormous difference in your family’s financial future.

The Community Spouse: Who Are We Talking About?

In Medicaid terminology, when one spouse enters a nursing home or requires institutional-level care, the two spouses are given distinct labels. The spouse receiving Medicaid long-term care is called the institutionalized spouse. The spouse who remains living at home is called the community spouse. Federal law — specifically the Medicare Catastrophic Coverage Act of 1988 — established special community spouse protections to prevent the at-home spouse from being left without adequate resources.

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How Medicaid Counts Assets for Married Couples

When a married applicant applies for Medicaid, the state looks at the combined assets of both spouses, regardless of whose name they are in. These are called countable assets and typically include bank accounts, investments, vacation properties, and most savings. However, certain assets are exempt from the calculation, including:

• The primary home (if the community spouse lives there)
• One vehicle
• Personal belongings and household furnishings
• Prepaid funeral or burial plans
• Term life insurance policies

The state calculates the total countable assets as of the date the institutionalized spouse first enters a medical facility — this is called the snapshot date.

The Community Spouse Resource Allowance (CSRA)

The most important protection for the healthy spouse is the Community Spouse Resource Allowance (CSRA). This is the amount of countable assets the community spouse is allowed to keep. In 2026, federal law sets the following limits:

Note: Exact CSRA amounts vary by state. Some states set the CSRA at the federal maximum for all applicants; others use a 50% formula. Always verify your state’s rules with a Medicaid planner or elder law attorney.

Typically, the community spouse is entitled to keep 50% of the couple’s combined countable assets, up to the federal maximum. If half of the assets falls below the minimum, the community spouse keeps at least the minimum amount.

Income Protections: The Monthly Maintenance Needs Allowance

Beyond assets, Medicaid also protects the community spouse’s monthly income. If the community spouse’s own income is low, they may be entitled to receive a portion of the institutionalized spouse’s income. This is called the Monthly Maintenance Needs Allowance (MMMNA). In 2026, the federal minimum is $2,555 per month and the maximum is $3,853.50 per month. States may set their own figures within these federal limits.

The Medicaid Spend-Down: What Must Be Used First?

Any assets above the CSRA must generally be spent down before the institutionalized spouse qualifies for Medicaid. This does not necessarily mean giving money away — spend-down strategies can include:

• Paying off the mortgage or other debts
• Home repairs or modifications (such as accessibility upgrades)
• Purchasing an annuity that converts assets into an income stream for the community spouse
• Prepaying funeral and burial expenses
• Purchasing an upgraded vehicle for the community spouse

Caution: Gifting assets or transferring them below fair market value can trigger a Medicaid penalty period, during which Medicaid will not pay for care. This look-back period is typically five years. Always consult a qualified elder law attorney before making transfers.

Can the Community Spouse Appeal for More?

Yes. If the community spouse can demonstrate that the standard CSRA is not sufficient to meet their living expenses, they may request a fair hearing to have the allowance increased. Courts have also ruled in favor of community spouses in many cases. This is another reason why professional guidance is so valuable.

What This Means for Seniors

If your spouse needs nursing home care or is applying for Medicaid, you do not have to lose everything. Federal law was written to protect you. Here’s what you should do:

1. Last Updated on 24 July 2026 by ingmin