How Much Money Can a Medicaid Spouse Keep?

For married couples in Missouri and Arkansas, federal and state laws prevent a healthy spouse from becoming impoverished while their partner receives nursing home care. This is accomplished through the Spousal Impoverishment Protection, which includes the Community Spouse Resource Allowance and the Minimum Monthly Maintenance Needs Allowance.

In 2025, the community spouse can generally keep a significant portion of the couple’s assets, with a maximum Community Spouse Resource Allowance of up to $157,920. This protects the financial well-being of the non-applicant spouse while their partner qualifies for Medicaid benefits.

Dumm Takeaways

• A healthy spouse can keep a portion of the couple’s assets through the Community Spouse Resource Allowance.
• Federal spousal impoverishment rules prevent financial ruin when one partner needs long-term care.
• The Maximum Monthly Maintenance Income Allowance protects the community spouse’s income.
• The “snapshot date” is an important moment for determining a couple’s countable assets.
• A primary residence is generally considered an exempt asset.
• Medicaid’s five-year look-back period can penalize asset transfers made before applying.
• Irrevocable trusts can protect assets, but the grantor gives up control.
• Retirement accounts and annuities have a special status and should be handled with care.

The Money a Healthy Spouse Can Keep to Live On

The federal Spousal Impoverishment Protection Law makes sure the community spouse is not left without money. This happens when one spouse needs long-term care and must qualify for Medicaid. This is a vital safeguard against poverty. The amount of money a community spouse can keep is determined by specific rules related to both assets and income, with a focus on a couple’s combined financial picture.

Community Spouse Resource Allowance

The Community Spouse Resource Allowance (CSRA) is a core component of spousal impoverishment protections. This provision of Medicaid law permits the community spouse to retain a certain amount of the couple’s countable assets to avoid financial hardship. The figure is a calculation based on the couple’s combined assets on the “snapshot date” and state-specific minimum and maximum limits. Proper Medicaid planning is necessary to ensure that the maximum asset share is protected for the healthy spouse.

State-Specific Allowance Amounts for Missouri and Arkansas

Both Missouri and Arkansas follow the federal spousal impoverishment rules. For 2025, a healthy spouse can keep an asset share of between a minimum of $31,584 and a maximum of $157,920. The exact amount is half of the total countable assets, but it cannot fall below the minimum or exceed the maximum.

The Snapshot Date That Determines Your Assets

The “snapshot date” is a significant concept in the application for Medicaid. It is the first day of the month in which a nursing home resident has a continuous stay of at least 30 days. On this date, the state Medicaid agency takes a financial snapshot of all the couple’s countable assets. This fixed point in time is used to calculate the Community Spouse Resource Allowance, making it a pivotal moment for asset protection.

What Counts as a Resource for Medicaid?

Not all assets are counted toward Medicaid eligibility. Countable assets, also known as non-exempt assets, include liquid assets such as checking and savings accounts, stocks, bonds, and mutual funds. Exempt assets, on the other hand, do not count against the asset limit. Common exempt assets are the primary residence, one vehicle, and personal belongings.

The Rules About a Spouse’s Income and the Monthly Allowance

Beyond assets, a community spouse’s income is also protected under spousal impoverishment rules. The Medicaid agency recognizes that the healthy spouse requires a certain level of monthly income to maintain their home and lifestyle.

Spousal protections stop the community spouse from losing all their income to pay for nursing home care. They allow some of the institutionalized spouse’s income to be given to the community spouse if needed.

What Is the Monthly Maintenance Needs Allowance?

The Monthly Maintenance Needs Allowance (MMMNA) is the minimum amount of monthly income a community spouse is entitled to keep for their own living expenses. If the community spouse’s monthly income is below a set allowance, some of the Medicaid recipient’s income goes to them. This raises their total income to the minimum.

Calculating the Allowance in Missouri and Arkansas

Missouri and Arkansas follow federal guidelines. They also have a few state-specific rules. For 2025, the Monthly Maintenance Needs Allowance can range from a minimum of approximately $2,643.75 to a maximum of $3,948. A qualified Medicaid planner or elder law attorney can assist in the exact calculation, which may be influenced by housing costs and a Standard Utility Allowance.

Protecting Your Income While Your Spouse is in Care

Several strategies exist to protect spousal income and assets.

• Income Diversion: Income from the institutionalized spouse can be directed to the community spouse to meet the MMMNA.
• Medicaid Compliant Annuities: A lump sum of countable assets can be converted into an income stream for the community spouse. These annuities must meet strict Medicaid law guidelines.
• Spousal Refusal: In some states, a community spouse can refuse to financially contribute to their partner’s nursing home care, although this comes with unique considerations and consequences.

Protecting the Family Home From Medicaid

For many couples, their family home is their most valuable asset. It is a common source of concern that the home might need to be sold to cover nursing home care. While the rules are nuanced, there are legal protections in place to ensure a spouse is not forced from their home. An important aspect of Medicaid law is the distinction between exempt assets and countable assets.

Primary Residence Is an Exempt Asset

During a Medicaid applicant’s lifetime, their primary home is usually an exempt asset. This means Medicaid does not count it against the asset limit for eligibility. This holds true as long as the community spouse or other qualifying relative resides there. It provides a significant layer of asset protection. Home ownership is therefore protected while one spouse is in long-term care, subject to equity value limitations in some states.

What Happens to the Home When the Medicaid Spouse Dies?

After a Medicaid beneficiary’s death, their home becomes part of their estate. Medicaid Estate Recovery programs are then required by federal law to attempt to recover the cost of the Medicaid benefits paid from the deceased’s estate. However, recovery is delayed as long as there is a surviving community spouse residing in the home.

Proactive Medicaid Planning for Couples

Medicaid eligibility is not just for those with no financial resources. Many middle-class families can qualify for long-term care benefits through strategic Medicaid planning. This requires working with a Certified Medicaid Planner or an elder law attorney to create a plan that legally protects assets while ensuring the applicant meets the asset test.

Best Time to Begin the Planning Process

Starting the planning process early is essential. Ideally, a couple should begin to consider Medicaid planning at least five years before a potential need for nursing home care arises. The reason for this timing is directly related to the Medicaid look-back period.

Use Irrevocable Trusts to Protect Assets

An important tool in Medicaid planning is the irrevocable trust, often called a Medicaid Asset Protection Trust. Once assets are transferred into this type of trust, they are no longer considered owned by the individual and thus are not counted against the asset limits.

• Loss of Control: The grantor gives up control over the assets in the trust.
• Trustee Role: A designated trustee, such as an adult child, manages the assets.
• Protection from Estate Recovery: Assets in a properly structured irrevocable trust are protected from the Medicaid Estate Recovery program.

Medicaid Look-Back Period

The Medicaid Look Back Period is a 60-month window preceding the application for Medicaid Long Term Care. The state Medicaid agency reviews all financial transactions during this period to identify any asset transfers for less than fair market value. Transferring assets during this time can result in a penalty period, delaying Medicaid benefits. This rule is designed to prevent people from simply giving away their money and property to qualify for care.

What Medicaid Does and Does Not Count

When applying for Medicaid benefits, a person’s financial resources are divided into two categories: countable and non-countable assets. Understanding this distinction is essential for a successful application. A Medicaid agency applies an asset test to see if a person’s financial situation meets the required limits for nursing home care or long-term care Medicaid.

Excluded Assets That Do Not Affect Eligibility

Many people are surprised by what is considered an exempt asset. The primary residence is typically not counted against the asset limit, provided certain equity value requirements are met. Other common examples include one automobile, household furnishings, personal belongings like clothing and jewelry, and a prepaid burial plot or funeral plan. These non-countable assets do not need to be spent down to qualify for Medicaid.

Common Countable Assets You Need to Know About

Medicaid looks at countable assets, or non-exempt assets, to determine financial eligibility. These are liquid assets that can be converted to cash and include:

• Cash, checking accounts, and savings accounts
• Stocks, bonds, and mutual funds
• Certificates of deposit (CDs)
• Additional real estate beyond the primary home

Any asset transfer of these non-exempt assets must be handled carefully to avoid a penalty period from the Medicaid agency.

The Special Status of Retirement Accounts and Annuities

The treatment of retirement accounts like IRAs and 401(k)s can be a complex area of Medicaid law. In many states, including Missouri and Arkansas, retirement accounts are considered countable assets if they are not in a payout status. However, a Medicaid-compliant annuity, which converts a lump sum into a stream of income for the community spouse, can be a legal way to reduce countable assets.

The Difference Between State and Federal Rules

Medicaid is a joint federal and state program, which means there is no single set of rules that applies everywhere. The federal government provides a general framework. Each state can set its own asset limits and income caps for nursing home Medicaid and long-term care Medicaid. It is the state’s responsibility to administer its own program within these broad federal guidelines.

Medicaid Application Process in Missouri

Applying for Medicaid benefits in Missouri requires submitting an application to the Missouri Department of Social Services. The application process will require documentation of all assets, income, and a long-term care needs assessment. To meet the asset limits, a couple may need to execute a spend down plan.

• You can apply online through the MyDSS portal.
• Paper applications can be submitted to a local Family Support Division office.
• A certified Medicaid planner can provide assistance.

Medicaid Application Process in Arkansas

Applications for Medicaid in Arkansas are handled by the Department of Human Services. The state has specific rules for long-term care and in-home care, and the application requires complete financial disclosure. The agency will review all assets, including liquid assets and non-exempt assets, to determine eligibility.

• Applications can be submitted online through the Access Arkansas portal.
• In-person assistance is available at local DHS offices throughout the state.
• Seeking counsel from an elder law attorney is a wise decision to help with the asset protection process.

Table: Financial Figures for Medicaid in Missouri and Arkansas (2025)

Category	Missouri (2025)	Arkansas (2025)
Applicant Asset Limit	$6,068.80	$2,000
Maximum Community Spouse Resource Allowance (CSRA)	$157,920	$157,920
Minimum Community Spouse Resource Allowance (CSRA)	$31,584	$31,584
Maximum Monthly Maintenance Needs Allowance (MMMNA)	$3,948	$3,948
Minimum Monthly Maintenance Needs Allowance (MMMNA)	$2,643.75	$2,643.75
Home Equity Limit for Exemption	$730,000	$730,000

Spousal Protections and Why They Matter

The Spousal Impoverishment Law was designed to address a common and devastating problem: the financial ruin of a healthy spouse when the other requires long-term care. Prior to this federal law, families were often forced to exhaust nearly all of their assets to qualify for Medicaid, leaving the community spouse in a state of poverty.

The Purpose of the Spousal Impoverishment Rules

The primary purpose of the Spousal Impoverishment Rules is to protect the community spouse from having to spend down their life savings to pay for their partner’s nursing home care. These rules apply to nursing home Medicaid and some in-home care services. These programs allow the institutionalized spouse to receive benefits without making the community spouse poor. The rules are centered on the principle of providing a legal and equitable way to secure both spouses’ futures.

How the Rules Prevent Financial Ruin

Spousal Impoverishment Protection prevents financial ruin by safeguarding both assets and income.

• Asset Protection: The Community Spouse Resource Allowance legally protects a significant portion of a couple’s countable assets.
• Income Protection: The Monthly Maintenance Needs Allowance ensures that the community spouse has a guaranteed source of income for living expenses, even if the majority of the couple’s income was in the name of the institutionalized spouse.
• Home Ownership: For a community spouse, their home is an exempt asset.

Working with an Elder Law Attorney

For couples, dealing with the complexities of Medicaid laws can be overwhelming. An expert elder law attorney or a Certified Medicaid Planner can provide guidance and create a customized Medicaid planning strategy. They can assist with a spend-down plan, manage asset transfers, and ensure that the application for Medicaid is completed accurately, preventing costly delays or denials.

Other Considerations for Married Couples

While the primary focus of Medicaid planning is often on a couple’s major assets and income, other financial holdings can also impact eligibility. Overlooking these specific items can result in a denial of Medicaid benefits or a penalty period. A thorough review of all financial assets is essential to a successful application for Medicaid.

Second Home or Vacation Property

Unlike a primary residence, a second home or vacation property is considered a non-exempt asset. The equity value of this type of real estate is counted toward the asset limits for Medicaid eligibility. To qualify, a couple may have to “spend down” the value of the property or sell it. A legal asset transfer to a trust could also be an option, but it would be subject to the Medicaid look-back period.

How to Handle a Family Business

A family business can be a complex asset in the context of Medicaid planning.

• Operational Status: If the business is an actively operating entity that provides income, it may be considered an exempt asset, as it is a source of livelihood.
• Ownership and Value: The legal structure of the business and its overall value will be scrutinized by the Medicaid agency. Non-operating businesses or their assets may be considered countable assets.
• Income Stream: The income generated by the business is a factor in determining the monthly income for the community spouse.

Impact of Life Insurance Policies

The cash value of a life insurance policy is often a countable asset. Term life insurance policies typically have no cash value, so they are not counted. However, whole life, universal, or other policies with a cash surrender value will be counted against the asset limit. The death benefit of these policies is not relevant to eligibility, but the cash value must be considered in any spend-down strategy.

Frequently Asked Questions

1. What is the “spend down” process?

Medicaid spend down is a process where an applicant must reduce their countable assets to meet the state’s asset limits. It often involves using excess funds to pay for medical bills or other approved expenses.

2. Does a family business count as an asset?

It depends. An actively operated family business may be considered exempt, especially if it provides the community spouse’s monthly income. A business that is not operational is generally counted as an asset.

3. Can I get a Medicaid Waiver for home care?

Yes, a Medicaid Waiver, such as the HCBS Medicaid Waiver, can help cover the costs of care provided in a person’s home or community. It is an alternative to institutional long-term care Medicaid.

4. What is the difference between Medicare and Medicaid?

Medicare is a federal program primarily for seniors and those with disabilities, regardless of income. Medicaid is a joint federal and state program for low-income individuals.

5. What is a Miller Trust?

A Miller Trust is a legal tool used in income-cap states to help people whose income exceeds the Medicaid limit to still qualify. Income is deposited into the trust and is not counted against eligibility.

6. How does my spouse’s income affect me?

The Community Spouse Maintenance Needs Allowance ensures that you, the community spouse, can keep a certain amount of your monthly income for living expenses. Your spouse’s income may be diverted to you to meet this allowance.

Conclusion

Proactive estate planning for long-term care is one of the most effective ways to protect your family’s financial security. By taking action now, you can legally safeguard your assets and ensure your spouse can live comfortably. A qualified estate planner can help you create a personalized plan to meet your specific needs. Do not wait for a crisis to begin the process. Taking this step now provides peace of mind.

Book a Free Consultation today to start your personalized plan.