Medicaid spend-down, explained

Many people first hear the phrase "Medicaid spend-down" in a hospital hallway or a nursing home office. It can sound like a penalty. It isn't: it is simply how most people move from paying for care themselves to Medicaid paying.

This post explains how the spend-down works, step by step, using Washington's rules and figures as the worked example. It is general information, not advice for any one family. It is part of our guide to paying for care and protecting what you leave.

What "spending down" means

Medicaid is a joint federal and state program, and each state runs its own version. In Washington it is called Apple Health, run by the Health Care Authority (HCA). Its long-term care rules are in chapter 182-513 of the Washington Administrative Code (WAC).

Medicaid pays for long-term care only once a person's countable savings are under a set limit. Until then, care is usually paid from those savings. "Spending down" is the everyday name for that stretch.

It is not a trick, and it is not something you have to arrange. It is what happens as care gets paid for.

How much can you keep in Washington?

For a single person getting long-term care, Washington's resource limit is $2,000 (WAC 182-513-1350). The same limit applies to a married person in a nursing home, with separate protections for the spouse at home, covered below.

"Resources" means things you own that could be turned into cash: bank accounts, investments, a second property. But several things are not counted at all.

What doesn't count toward the limit

Washington's rules set aside these items, so they don't have to be spent down:

Other states have their own lists and limits. These details also change, so check the current rules before relying on them.

How savings come down: allowed ways to spend

Spending your own money on yourself is allowed. Paying for your care, your rent, your groceries and your bills is exactly what a spend-down is.

Washington's rule also lets a person reduce excess resources with medical bills they owe (WAC 182-513-1350). The bills must still be owed, and they can include health insurance and Medicare costs.

Under the current rule, the bills must have been incurred no more than three months before the month of the application. A version of the rule taking effect January 1, 2027 shortens that to two months.

For someone in a nursing home, savings left over after medical bills are applied to the projected cost of care. Medicaid then starts once what remains is within the limit.

What doesn't work: giving it away

Giving money or property away is different from spending it. When you apply, Washington looks back 60 months for anything given away or sold for less than it was worth (WAC 182-513-1363).

A gift inside that window doesn't get taken back. Instead, Medicaid is delayed. The state adds up the gifts and divides by the statewide average daily private cost of a nursing home.

HCA lists that daily rate as $485, effective October 1, 2026 (HCA standards). So, as simple arithmetic, a $48,500 gift would mean 100 days without Medicaid paying.

The rule has exceptions, including some transfers to a spouse or a disabled child. Our post on the Medicaid look-back period explains how the window is counted and which transfers are allowed. For planning that is done years ahead, see how to protect assets from Medicaid, legally.

If you're married: the spouse at home

Washington protects the spouse who stays at home, called the community spouse. They keep a share of the couple's countable resources, figured under WAC 182-513-1355.

That share is the larger of two amounts. One is half the couple's combined countable resources, up to a federal maximum. The other is the state standard.

All three figures come from HCA's income and resource standards chart (HCA standards). They change regularly, and couples' situations vary a lot. This is a place where a local elder law attorney earns their fee.

What happens to your income once Medicaid pays?

Spend-down is about savings. Income works differently: once Medicaid pays for care, most of your monthly income goes toward the cost, called your participation.

Washington's rule lets certain amounts come off first (WAC 182-513-1380). These include a personal needs allowance for you, taxes you owe, an allowance for a spouse at home and some medical bills.

For most people in a nursing home, HCA lists that personal needs allowance as $108.74 a month (2026). For people getting HCS or DDA waiver services at home, it's $2,982 for a single person (HCA standards).

Spend-down at a glance

1. Care starts, usually paid from savings and income, or from a long-term care insurance contract first if you bought one.
2. Countable savings come down as care and bills are paid.
3. Home, one car, household goods and burial funds stay protected, within the limits above.
4. Once countable savings are near $2,000 (single, in Washington), you apply.
5. The state reviews the past 60 months for gifts.
6. Medicaid starts paying; most income goes toward care, minus the allowances.

Who handles all of this if you can't?

A spend-down involves paperwork: bank statements, bills, applications, proof of every transfer. If you are in a hospital or nursing home, someone else has to do it. For an adult child doing it for a parent, our post on caregiver burnout may help.

That is the job of the agent in your financial power of attorney or the trustee of your trust. Without one, a family may need a court before they can touch your accounts. A power of attorney signed early avoids that.

After death, federal rules require states to seek repayment from some estates. This applies to people 55 or older when Medicaid paid for their long-term care (Medicaid.gov). Our post on Medicaid estate recovery explains how that works and when it's delayed.

What happens to a Kinly membership

The Kinly Lifetime Promise covers this situation directly (the promise). After two years of membership, if you spend down to the point where Medicaid is paying for your care, Kinly stops billing you.

The membership continues, the documents stand, and the number still gets answered. How it works has the rest.

Common questions

How does the Medicaid spend-down work?

You pay for care from your own savings until your countable resources fall under the state's limit, then Medicaid starts paying. In Washington that limit is $2,000 for a single person in long-term care. Your home, one car, household goods and some burial funds don't count.

Can I keep my house and still get Medicaid in Washington?

Usually, yes. A home is excluded if you live there, your spouse or a dependent relative lives there, or you intend to return. For long-term care, home equity above $1,130,000 (2026) makes you ineligible unless a spouse or certain children live there.

Can I give money to my children during a spend-down?

Gifts made within 60 months before applying can delay Medicaid in Washington. The delay is the gift total divided by the state's average daily private nursing home cost, $485 as of October 2026. Some transfers are exempt, so talk to an elder law attorney first.

What can a spouse at home keep?

In Washington, the spouse at home keeps the larger of two amounts. One is half the couple's countable resources, up to $162,660 in 2026; the other is the state standard of $72,529. They may also receive part of the other spouse's income, up to a monthly maximum.

Does every state use the same spend-down rules?

No. Federal rules set a framework, but each state sets many of its own limits and details. This post uses Washington's rules and figures; check your own state's Medicaid agency for its rules.

Sources

• WAC 182-513-1350: Long-term care resource standards, excess resources and home equity
• WAC 182-513-1355: Community spouse resource allocation
• WAC 182-513-1363: Transfer of assets and the 60-month look-back
• WAC 182-513-1380: Client participation in the cost of care
• WAC 182-512-0350: Property and contracts (home, household goods)
• WAC 182-512-0400: Vehicles
• WAC 182-512-0500: Burial funds, contracts and spaces
• Medicaid.gov: Estate recovery
• Washington Health Care Authority: Apple Health Income and Resource Standards, October 1, 2026 (PDF)