Medicaid (Baseline)
The nation's largest long-term-care payer, covering six in ten nursing home residents — with strict, state-specific asset and income tests.
What it is
Medicaid is a joint federal-state program and the nation's largest single payer of long-term care, covering approximately 61% of nursing home residents nationally and the majority of home- and community-based services (HCBS) spending for people with functional dependency. It was designed as a safety net for low-income Americans, not as a middle-class long-term care benefit — which is exactly why the planning techniques in Pillars 6 and 7 exist. See Medicaid.gov's overview of seniors and dual Medicare-Medicaid enrollees for the federal framework.
Medicaid funds long-term care through three main pathways: nursing home (institutional) Medicaid, Home and Community-Based Services (HCBS) waivers for home care and assisted living services, and PACE (Program of All-Inclusive Care for the Elderly), a combined Medicare/Medicaid managed-care benefit available in about half of U.S. counties.
The 2026 financial eligibility numbers
Two tests must be passed simultaneously: a resource (asset) test and an income test. Figures below are 2026 federal figures — states have discretion within these ranges, so always confirm the exact number in your state.
| Category | 2026 Countable Limit | Notes |
|---|---|---|
| Single applicant assets | $2,000 | Higher in a few states |
| Community Spouse Resource Allowance (CSRA) | Up to $157,920 | Federal maximum; some states allow up to this figure, others less |
| Applicant income (income-cap states) | $2,901/month | 300% of SSI; ~24 states use an income cap, others use spend-down |
| Community spouse minimum income (MMMNA) | $2,555–$3,948/month | Federal floor to ceiling; state-set within that range |
| Home equity cap (non-spouse cases) | $752,000–$1,130,000 | State elects; Florida uses $752,000; no cap in California |
| Personal needs allowance (in nursing home) | $30–$200/month | State-set; retained by applicant for personal use |
Source: distilled from the Medicaid Planning white paper (2026 figures, CMS & state Medicaid agency data). Every figure changes annually and varies by state — confirm current numbers with a licensed elder-law attorney and the official Medicaid.gov eligibility page for your state.
Who it fits
- Applicants whose countable assets are already at or near the state limit
- Families who have completed a spend-down (see Pillar 6 and 7 for how that's done correctly)
- Anyone already relying on Medicaid as a primary long-term care funding source
Not a last resort — a legitimate pillar
Despite its reputation, Medicaid is not something to be ashamed of or to avoid discussing. It is a legitimate, heavily used funding pillar that millions of American families rely on. The planning conversation isn't whether to consider Medicaid — it's how and when to position assets so that qualifying for it doesn't require losing everything first. For a consumer-facing summary of how Medicaid fits alongside other funding sources, see LTC News' guide to Medicaid for long-term care.
Supporting Articles
- Blog How to Start the Long-Term Care Conversation With Aging Parents
- Blog Medicaid Estate Recovery: What Happens to a Home After Death
- Blog Spousal Impoverishment Protections: Keeping the At-Home Spouse Solvent
- Blog Assisted Living vs. Nursing Home: How the Funding Actually Differs
- Blog Irrevocable Trusts for Medicaid Planning: What They Do and When to Use Them
- Blog How Families Actually Combine the 10 Funding Pillars
Sources
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