Medicaid Spend-Down and 2026 Asset Limits in Minnesota

What counts and what is exempt

Medical Assistance divides what you own into countable and exempt assets. Countable assets, like cash, savings, most investments, and a second property, must come down to the limit. Exempt assets do not count against you.

Assets that are usually exempt include:

• Your home, while you or your spouse live there, up to the equity limit
• One vehicle
• Personal belongings and household goods
• A prepaid, irrevocable burial arrangement and a modest burial fund
• Certain retirement accounts in payout status, depending on the situation

The five-year look-back

When you apply for Medical Assistance for long-term care, the state reviews financial records for the previous five years (60 months). If you gave away assets or sold them for less than they were worth during that window, you can be assessed a penalty period during which Medical Assistance will not pay for care. This is why gifting money to family to qualify usually backfires.

Legitimate spend-down, on the other hand, is expected and allowed. Spending your own money on your own care and needs is exactly what the program anticipates.

Legitimate ways to spend down

Common, allowed ways to reduce countable assets include:

• Paying for care, medical bills, and health-related expenses
• Paying off a mortgage, debts, or credit cards
• Needed home repairs or accessibility modifications (ramps, grab bars, a walk-in shower)
• Buying one reliable vehicle
• Setting up a prepaid, irrevocable funeral and burial plan

Protections for a married couple

When only one spouse needs care, Minnesota's spousal-impoverishment rules let the spouse who stays home keep a share of the couple's assets (the Community Spouse Resource Allowance) and a minimum monthly income. Planning around these protections is one of the most valuable things an elder-law attorney can do for a couple, and it is very situation-specific.

How to apply, step by step

1. 1

   Inventory everything you own

   List assets and roughly what each is worth, and gather statements going back five years. You will need this for the look-back review.

2. 2

   Sort countable from exempt

   Separate what counts (cash, savings, investments, extra property) from what is usually exempt (home within the equity limit, one car, personal belongings, prepaid burial).

3. 3

   Get elder-law advice before moving anything

   A qualified elder-law attorney can map a legitimate spend-down and protect a spouse's share. Do not gift assets to family to qualify; it can cause a penalty period.

4. 4

   Spend down on care and allowed expenses

   Reduce countable assets to the limit by paying for care, debts, home repairs, a vehicle, or a burial plan, keeping receipts.

5. 5

   Apply for Medical Assistance

   Once assets are within the limit, apply through your county or Tribal human services agency, including the long-term-care asset assessment.