Medicaid spend-down planning checklist for Alzheimer's caregivers is a step-by-step way to lower countable assets to meet long-term-care Medicaid limits while protecting a spouse and avoiding penalties. Spend-down means using excess savings on allowed needs, such as medical bills or home repairs, rather than giving money away. Alzheimer's care often shifts from help at home to full-time supervision and then to nursing-facility care. The Alzheimer's Association describes Medicaid as the only federal program covering the extended nursing-home stays often required in late-stage dementia and home and community care in earlier stages.
Medical information disclaimer: This article is for general educational purposes only and does not provide medical advice, diagnosis, or treatment. Always consult a physician or other qualified health professional about symptoms, medications, tests, or treatment decisions.
Official resources:
- Check eligibility on CMS’s official study page — Use this page to check the study’s participation requirements.
- Read the official guidance from Medicaid — Use this primary source to verify the official guidance.
Table of Contents
- What asset limit must you meet?
- How do you spend down safely?
- What if a spouse still lives at home?
- What care will Medicaid cover?
- What happens to the house after death?
What asset limit must you meet?
In most states a single person seeking long-term-care Medicaid must reduce countable assets to about $2,000. The American Council on Aging reports in its Medicaid spend-down limits guide that couples where both seek care face about $3,000, with higher exceptions in some states. Countable assets generally include bank accounts, investments, and extra property.
Exempt assets generally include the primary home, one vehicle, household goods, and an irrevocable burial fund. The home exemption has a cap. The 2026 federal minimum home-equity cap is $752,000, so equity above the state limit can block eligibility.
How do you spend down safely?
Start with a full list of accounts, deeds, debts, and monthly care costs. Then use excess funds for needs that help the person with Alzheimer's directly.
Do not give cash to children or sell property below market value to qualify faster. LegalClarity elder-law reporting explains in its guide to gifts and Medicaid penalties that gifts to family trigger the look-back penalty, while paying medical bills, debt, repairs, and prepaid funerals are permitted uses.
- Pay medical bills, dental care, therapies, and personal-care costs
- Pay mortgage, credit cards, and other real debt
- Fix the home and add access features such as grab bars, ramps, and walk-in showers
- Prepay a funeral arrangement and fund an allowed burial account
What if a spouse still lives at home?
Spousal-impoverishment rules let the at-home spouse keep income and some resources. In 2026 that spouse may retain between $32,532 and a maximum $162,660 in countable resources plus a monthly income allowance, according to the Medicaid.gov and CMS standards in the April 2026 standards bulletin. Keep the healthy spouse's housing, food, utility, and medical costs in one file.
The income allowance depends on need, so missing bills can lower the protected amount. Do not move all savings into the sick spouse's name before applying. Ask the state Medicaid office how to title accounts and document the spouse's share.
What care will Medicaid cover?
For eligible Alzheimer's patients Medicaid covers nursing-facility care plus home- and community-based waiver services. Waiver services can support personal care, adult day care, respite, and other home help, depending on the state plan. Many states also let beneficiaries hire chosen caregivers including family through consumer-directed programs.
Dementia Care Central describes these options in its guide to paid dementia caregivers. Match the application to the current stage of dementia. Earlier stages may need home help and supervision, while late stages may need full nursing-facility placement.
What happens to the house after death?
States must seek estate recovery from a deceased enrollee age 55 or older for nursing-facility, home and community-based, and related hospital and drug payments. That claim can reduce what passes to heirs even when the home was exempt during life.
Keep deeds, loan statements, repair receipts, and funeral contracts with the Medicaid file. Survivors will need those records to answer the recovery claim and show what remains exempt.
