When one spouse enters a Medicaid-funded nursing home, federal spousal-impoverishment rules let the spouse who remains at home keep up to $162,660 in countable assets in 2026, up from $157,920 in 2025. That number, called the Community Spouse Resource Allowance, is not a flat federal check handed to every couple; it is calculated from the household’s combined resources as of a fixed date tied to the institutionalized spouse’s care. The couple’s home receives a separate, and in the most common case far larger, protection: when the community spouse keeps living there, the house is exempt from Medicaid’s asset test entirely, with no dollar ceiling attached at all.
How the Resource Allowance Is Actually Calculated
The $162,660 ceiling is a maximum, not an automatic grant. A Medicaid caseworker starts by adding the countable assets both spouses held anywhere, valued as of the first day of the institutionalized spouse’s most recent continuous stay in a hospital or nursing facility, a date known as the snapshot. The community spouse is then generally entitled to keep half of that combined total, a figure called the spousal share, up to the federal maximum, while the institutionalized spouse’s remaining share has to be spent down toward that person’s own much lower individual resource limit before Medicaid will approve the application.
That maximum rose for 2026: the Community Spouse Resource Allowance climbs to $162,660, up from $157,920 in 2025, an increase built into the federal formula’s annual cost-of-living adjustment. The floor moves the same way. If half of a couple’s combined countable assets comes out below the federal minimum, the community spouse is guaranteed to keep the minimum regardless, a figure that rose to $32,532 in 2026. States may set a minimum above the federal number, but none may set the maximum higher than $162,660 or lower than the federal floor.
The snapshot date creates a boundary that outlives the calculation itself. Assets the couple owned on that date fix the spousal share, even if the institutionalized spouse’s care does not actually begin for months afterward or a fair hearing later adjusts the split. Anything the institutionalized spouse still holds above their own individual limit, typically $2,000 in most states, then has to be spent on care, converted into an exempt asset, or formally transferred to the community spouse before eligibility is approved, a step nursing-home admissions staff routinely flag but rarely walk families through in detail.
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Why the Home Escapes the Equity Limit Entirely
Medicaid does apply a dollar limit to home equity, but only when no community spouse, minor child, or disabled adult child is living in the house. That limit is real and it climbed for 2026: the federal floor is $752,000, and states may raise it as high as $1,130,000, with roughly a dozen states and the District of Columbia using the higher figure. California has dropped the home equity test from its Medicaid program altogether. Applicants who are single, widowed, or otherwise living without a qualifying relative in the home are the ones this ceiling actually governs.
That distinction is why the more common case, a married applicant whose spouse remains in the family home, produces a different outcome than the dollar figures alone suggest. A home occupied by the community spouse is excluded from the asset calculation without regard to its market value or equity, whether the property is worth $300,000 or $3 million. The exemption traces to the spousal-impoverishment section of federal Medicaid law, a different statutory provision than the home-equity-interest limit Congress added in 2006 specifically to cap sheltering wealth in real estate for applicants without a spouse in the house.
The practical effect is that two Medicaid applicants with identical nursing-home bills and identical home values can face entirely different outcomes depending on marital and living circumstances alone. A widow living alone in a $900,000 house exceeds the $752,000 floor most states use and may have to address that equity before qualifying; a married applicant whose spouse still lives in an identical $900,000 house faces no equity test on that home at all. The resource allowance and the home exemption were both built around the same goal, keeping a healthy spouse from losing a home and a lifetime of savings the same year a partner needs long-term care.
A 2028 Federal Cap Is Coming, But Not for This Exemption
The dollar range now separating states, $752,000 to $1,130,000, is scheduled to disappear as an option. The federal budget reconciliation law enacted in July 2025 sets a single national home-equity limit of $1 million effective in 2028, ending the practice of individual states choosing a higher ceiling within the federal range. Justice in Aging’s analysis of the new law describes the change as tightening eligibility for the applicants the equity limit currently governs, chiefly unmarried applicants and those without a spouse in the home, rather than expanding protections.
Nothing in the 2028 change touches the community-spouse exemption itself. The equity-limit statute and the spousal-impoverishment protections that shield an occupied home come from different sections of federal Medicaid law, and the reconciliation law amended only the former. A community spouse living in the family home in 2028 will still face no dollar ceiling on that home’s value, the same as today, even as the separate equity limit for unmarried applicants tightens to a flat $1 million nationwide, a reduction for the twelve or so states currently allowing $1,130,000.
What remains unresolved is how many households currently relying on a state’s higher $1,130,000 option will lose that flexibility once an applicant no longer has a spouse in the home, whether through death, divorce, or the spouse’s own move into care. For now, the $162,660 resource allowance and the unlimited home exemption together define what a community spouse actually keeps, a protection whose size depends less on the house’s price tag than on who is still living inside it.
This article was drafted with the assistance of AI tools and reviewed for accuracy before publication.
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