How much can the healthy spouse keep when the other spouse goes on Medicaid?

Key Takeaways:

• Spousal impoverishment rules protect part of the couple's assets and may allow some of the institutionalized spouse's income to support the spouse at home.
• For 2026, the protected resource amount falls between $32,532 and $162,660.
• Federal spousal-income standards include a $2,705 minimum and a $4,066.50 maximum for 2026, but Texas and Arkansas apply those figures differently.
• A home occupied by the community spouse, one vehicle, and many household and personal belongings are generally excluded from countable resources.

It is usually the first question a spouse asks, and it is rarely asked calmly. A husband has just been admitted to a nursing home at roughly $7,000 a month. His wife is 74, still living in the house they bought in 1988, and someone at the facility has told her that Medicaid will not pay until the couple is down to $2,000. She wants to know what is left for her.

The answer is a great deal more than $2,000. Congress built protections into the Medicaid statute in 1988 specifically to keep the at-home spouse out of poverty, and our Texas and Arkansas Medicaid Attorneys help families understand how those protections apply to their circumstances.

What Are the Spousal Impoverishment Rules?

The spousal impoverishment rules are federal protections that apply when one married person needs long-term care and the other stays home. They set aside a share of the couple's countable assets and a monthly income floor for the spouse who remains in the community. Both Texas and Arkansas administer these protections under section 1924 of the Social Security Act.

Medicaid uses two terms of art. The spouse entering the facility is the institutionalized spouse. The one staying home is the community spouse. The two protections that matter most are the resource allowance, which governs savings, and the monthly maintenance needs allowance, which governs income.

For the initial Medicaid resource calculation, resources owned by either spouse generally are considered together, regardless of whose name appears on the account.

Simply retitling savings in the healthy spouse's name shortly before applying generally does not remove those resources from the initial Medicaid calculation, as our explanation of how joint assets are divided for the at-home spouse describes in more detail.

What Counts as a Medicaid Resource? 

Medicaid does not treat everything a couple owns the same way. Countable resources commonly include cash, checking and savings accounts, investments, and some additional real estate. Other property, including a home occupied by the community spouse, one vehicle, household belongings, and certain burial arrangements, may be excluded. 

That distinction matters because the Community Spouse Resource Allowance applies to countable resources, not everything the couple owns. A family may therefore have substantially more than $162,660 in total property and still meet the resource rules, depending on what they own and which assets Medicaid excludes.

How Much of the Couple's Savings Can the Community Spouse Keep?

The community spouse can generally keep half of the couple's combined countable resources, subject to a federal floor and ceiling. For 2026, that floor is $32,532, and the ceiling is $162,660, according to the Centers for Medicare & Medicaid Services. The applicant spouse is then limited to $2,000 in countable resources.

The calculation starts with a snapshot. The state values the couple's countable resources as of the first day of the first continuous period of institutionalization, which generally begins when the spouse enters a qualifying institution and is expected to remain institutionalized for at least 30 consecutive days. That snapshot fixes the amount used to calculate the community spouse's protected share. 

The couple may still need to reduce excess countable resources before Medicaid eligibility begins, but gifts or other improper transfers can create additional eligibility problems.

How Does This Work in Practice?

Suppose a couple with $180,000 in countable savings is assessed at the snapshot. Half is $90,000, which falls between the floor and the ceiling, so the community spouse keeps $90,000. The couple would generally need to reduce their combined countable resources to $92,000—the community spouse's $90,000 protected amount plus the applicant's $2,000 resource limit—before the applicant could qualify financially. 

What that money can lawfully be spent on is its own subject, and the risks of gifting and improper spend-down are where families do the most damage to themselves.

Do You Have to Spend Everything Above the Protected Amount? 

No. “Spend down” does not necessarily mean handing all excess savings to the nursing home. Families may be able to use countable resources for legitimate expenses, pay debts, make needed home repairs, replace a vehicle, purchase certain exempt assets, or use other lawful Medicaid Planning strategies. 

What families should not do is start giving money or property away simply to reduce an account balance. Medicaid transfer rules can penalize gifts made during the applicable look-back period. The goal is to reduce countable resources in a way that meets Medicaid rules while preserving as much financial security as possible for the spouse who remains at home.

How Much Monthly Income Can the Community Spouse Keep?

Income protections work differently in Texas and Arkansas. For 2026, the federal standards set a minimum monthly maintenance needs allowance of $2,705 beginning July 1 and a maximum of $4,066.50. Texas currently uses a $4,066.50 spousal allowance when calculating how much of the institutionalized spouse's income may be available for the spouse at home. 

Arkansas uses a needs-based calculation that combines the minimum maintenance needs amount with qualifying excess shelter costs, subtracts the community spouse's own income, and applies the federal maximum. Beginning July 1, 2026, the federal monthly housing threshold used in that calculation is $811.50.

Community Spouse Income

The community spouse's own income generally is not treated as income available to pay for the institutionalized spouse's nursing home care. Instead, Medicaid determines whether some of the institutionalized spouse's income may be diverted to the community spouse. Structuring income is also where planning tools come in, including the Medicaid-compliant annuities.

Which Assets Are Generally Excluded From Medicaid Resources?

Certain assets are excluded when Medicaid determines the couple's countable resources, so they generally do not reduce the amount the community spouse may protect. The exclusions are more generous than most families expect:

• The home, as long as the community spouse lives there
• One vehicle, regardless of value
• Household goods and personal belongings
• Certain burial arrangements and other resources that qualify for Medicaid exclusions
• Certain term life insurance and burial funds within statutory limits

When the community spouse remains in the home, the Medicaid home-equity limit generally does not create the same eligibility problem. Federal law permits state home-equity limits between $752,000 and $1,130,000 in 2026, and Texas currently uses $752,000. Protecting the house from a later Medicaid estate recovery claim is a separate question, and one that a Lady Bird deed can often answer.

Can the Community Spouse Ever Keep More Than the Standard Allowance?

Yes. When the standard allowance leaves the community spouse without enough monthly income, she can request an expanded resource allowance through a fair hearing or obtain a court order for spousal support. Depending on the circumstances, a fair hearing or court order may increase the amount available to support the community spouse.

A higher allowance is possible in some circumstances, but the procedure depends on the state and the couple's financial situation. 

Texas applies an income-first rule when considering an increase in the protected resource amount, while Arkansas permits additional income protection in certain cases through a fair hearing or court-ordered support. These options should be evaluated before assuming that the standard resource calculation is the family's final number.

Where Do Texas and Arkansas Differ?

Texas and Arkansas both follow the federal spousal-impoverishment framework, including the 2026 resource floor and ceiling, but their income calculations are not identical. 

Texas currently uses a $4,066.50 spousal allowance, while Arkansas starts with the federal minimum needs allowance and may add qualifying excess shelter costs, subject to the federal maximum. Texas applications are administered through the Texas Health and Human Services Commission, while Arkansas applications are handled through the Arkansas Department of Human Services.

For families in the Texarkana area, where a couple may own a home on one side of State Line Avenue and a farm on the other, the distinction is not academic. Some Medicaid financial standards are updated each January, while the federal minimum monthly maintenance needs allowance and housing allowance are updated each July. That's why Ross & Shoalmire, P.L.L.C. publishes an annual Medicaid Desk Reference with the current Texas and Arkansas limits. 

Including long-term care planning in an Estate Plan can give families more options before a Medicaid crisis develops.