How Much Money Can a Spouse Keep When the Other Goes on Medicaid?

The phrase “Medicaid spend-down” terrifies spouses. It conjures images of depleted bank accounts, lost homes, and financial devastation for the healthy spouse while the other receives nursing home care.

Most of this panic is unnecessary. Federal law specifically protects spouses from impoverishment when one needs Medicaid nursing home care.

The rules allow the healthy spouse to keep substantial assets and income far more than most people realize.

Federal Spousal Impoverishment Protections Apply in Florida

When one spouse needs nursing home care and applies for Medicaid, special rules under federal law (42 U.S.C. § 1396r-5) protect the spouse who remains in the community.

These “spousal impoverishment provisions” prevent the community spouse (the well spouse staying at home) from being forced into poverty.

Florida follows these federal protections, allowing the community spouse to retain significant assets and income while the other spouse qualifies for Medicaid.

The Community Spouse Resource Allowance (CSRA)

The most important protection is the Community Spouse Resource Allowance (CSRA), which is the amount of countable assets the community spouse can keep.

In 2026, the CSRA in Florida allows the community spouse to retain up to $162,660 in countable assets. Florida is a “100% state,” meaning the community spouse can keep up to the full CSRA cap regardless of how the couple’s assets are split.

How it works:

• DCF totals all countable assets for both spouses
• The community spouse keeps up to $162,660
• The nursing home spouse must spend down to $2,000

What Assets Don’t Count Toward the Limits

Before calculating the CSRA, certain “exempt” assets are excluded entirely:

• Primary residence: Exempt as long as the community spouse lives there or the nursing home spouse intends to return home. For single applicants, the home equity limit is $752,000 in 2026, but there is no equity limit when a spouse resides in the home.
• One vehicle: Any value, completely exempt
• Personal belongings: Furniture, clothing, jewelry (with some limitations), and household goods
• Burial plots and prepaid funeral plans: Reasonable arrangements are exempt
• Life insurance: Policies with total face value of $2,500 or less are exempt for the applicant spouse. The community spouse’s life insurance is protected under the CSRA.
• Community spouse’s retirement accounts: IRAs and other retirement accounts belonging to the community spouse may be exempt if in payout status

These exempt assets remain protected beyond the CSRA limits, providing additional financial security.

Income Protections for the Community Spouse

Beyond asset protection, Florida Medicaid ensures the community spouse has adequate income through the Minimum Monthly Maintenance Needs Allowance (MMMNA).

2026 MMMNA Figures for Florida

How Income Allocation Works

• If the community spouse’s own income meets or exceeds the MMMNA: No allocation from the nursing home spouse is needed. The community spouse keeps all their own income regardless of amount.
• If the community spouse’s income falls below the MMMNA: The nursing home spouse can divert a portion of their income to the community spouse before paying the nursing home. This brings the community spouse’s total up to at least $2,644/month.
• If housing costs exceed the shelter standard ($794/month): The excess is added to the base MMMNA, potentially increasing the community spouse’s income up to the $4,067 maximum.

The nursing home spouse keeps only a $160/month personal needs allowance plus enough to cover Medicare premiums. The rest goes to the nursing home as “patient responsibility.”

Strategies to Protect Even More Assets in Florida

While the CSRA provides substantial protection, Florida law allows additional strategies:

Spousal Refusal

Florida is one of only two states (along with New York) that allows “spousal refusal.”

The community spouse formally refuses to make their assets available to pay for the nursing home spouse’s care, allowing the nursing home spouse to qualify for Medicaid while the community spouse retains assets beyond the CSRA.

Important trade-offs to understand:

• DCF takes the position that if the community spouse uses spousal refusal, they lose access to the MMMNA income diversion. This means the community spouse cannot receive any of the nursing home spouse’s income.
• The state is assigned the right to seek reimbursement from the community spouse, though Florida has historically not pursued these claims
• This strategy requires careful legal documentation and is not appropriate for every situation

Purchasing Exempt Assets

Converting countable assets into exempt assets reduces the spend-down without triggering penalties:

• Pay off the mortgage or make home improvements
• Purchase a vehicle
• Prepay funeral and burial expenses
• Make necessary home repairs

Increasing the CSRA Through Fair Hearing

If the standard CSRA leaves the community spouse without adequate resources, Florida allows appeals at a Medicaid fair hearing.

Courts have allowed increased CSRAs based on significant medical expenses, special housing needs, or unusual financial circumstances. This requires legal representation and strong documentation.

Unlimited Spousal Transfers

Asset transfers between spouses don’t trigger Medicaid penalty periods under federal law. The nursing home spouse can transfer assets to the community spouse without penalty.

These transfers alone don’t protect assets beyond the CSRA, but combined with other strategies they can maximize protection.

The Five-Year Lookback Period Still Applies

Even with spousal impoverishment protections, the 60-month lookback period under 42 U.S.C. § 1396p remains in effect for transfers to anyone other than the spouse.

Common mistakes that create penalties:

• Adding adult children to bank accounts or property deeds
• Gifting money to children or grandchildren
• Transferring property to family members
• Making large charitable donations

In 2026, the Florida penalty divisor is $10,645, meaning for every $10,645 in disqualifying transfers, Medicaid delays coverage by one month.

What Happens After the Nursing Home Spouse Dies

Assets protected under spousal impoverishment provisions remain with the community spouse.

There’s no “payback” requirement for properly protected spousal assets under the CSRA.

However, two important considerations:

• If spousal refusal was used: The state may have a claim against the community spouse’s estate for reimbursement of Medicaid expenses
• Estate recovery: Florida’s Medicaid estate recovery program can place claims against the probate estate of the Medicaid recipient after death. The primary home, while exempt during the community spouse’s lifetime, may become subject to recovery after the community spouse dies or permanently moves out.

Why Professional Guidance Matters

While federal law provides baseline protections, maximizing what the community spouse can keep requires understanding Florida’s specific rules and proper implementation.

Common planning opportunities include:

• Properly calculating and documenting the CSRA
• Increasing the MMMNA based on housing costs
• Strategic conversion of countable to exempt assets
• Evaluating whether spousal refusal is appropriate (and understanding the MMMNA trade-off)
• Planning for estate recovery
• Ensuring proper asset titling

The cost of a single month in a Florida nursing home without Medicaid coverage typically exceeds $10,000. Professional assistance with Medicaid planning often saves families tens of thousands of dollars.

Need Help Protecting Spousal Assets in Florida? Talk To Us

At Berg Bryant Elder Law Group, our Florida Board Certified Elder Law Attorneys specialize in spousal Medicaid planning. We’ve helped hundreds of Florida couples protect assets while qualifying for needed care.

Contact us today to discuss your situation and develop a strategy that protects your financial future while ensuring your spouse receives quality care.