Plain-English glossary — key terms explained

The basic self-care tasks a person performs every day: bathing, dressing, eating, toileting, transferring (moving from bed to chair), and continence. Medicaid long-term care programs typically require that an applicant need help with 2 or more ADLs to qualify for nursing home or in-home care benefits.

The maximum value of countable assets a Medicaid applicant may own and still qualify for long-term care benefits. Most states set this at $2,000 for a single applicant, though some states like California allow up to $130,000. Assets above the limit must be spent down or legally protected before Medicaid will pay for care.

A legal document that specifies your healthcare wishes if you become unable to communicate them yourself. Types include a living will (what treatments you do or don't want) and a healthcare proxy or durable power of attorney for healthcare (who can make decisions for you). Every adult should have one in place before a health crisis occurs.

The spouse who remains living at home when the other spouse (the "institutionalized spouse") enters a nursing home and applies for Medicaid. Federal law provides significant financial protections for the community spouse to prevent complete impoverishment, including the right to keep a protected share of assets and a monthly income allowance.

The maximum amount of countable assets the at-home spouse (community spouse) is allowed to keep when the other spouse applies for Medicaid long-term care. In 2026, the federal maximum CSRA is $157,920. Some states allow less. Assets above this amount must be spent down or protected through planning strategies.

A court-ordered legal arrangement in which a judge appoints someone (the conservator or guardian) to make financial or personal decisions for a person who can no longer do so themselves. Conservatorship is expensive (often $5,000–$15,000+), time-consuming, and public. It can be avoided entirely by having a durable power of attorney in place before incapacity occurs.

Assets that Medicaid counts toward the asset limit when determining eligibility. Common countable assets include bank accounts, savings, stocks, bonds, CDs, mutual funds, second homes, additional vehicles, and cash value life insurance. These assets must be spent down or legally protected before Medicaid will pay for care.

Non-medical, long-term assistance with Activities of Daily Living such as bathing, dressing, eating, and mobility. This is the type of care provided in most nursing homes and assisted living facilities for extended periods. Medicare does not cover custodial care. Medicaid, long-term care insurance, or private pay are the primary ways to fund it.

A legal document that authorizes a person you choose (your "agent") to manage your financial affairs on your behalf. "Durable" means it remains in effect if you become incapacitated — unlike a regular power of attorney, which ends at incapacity. Without a durable POA, your family may need to pursue a costly court conservatorship to manage your finances.

A federal requirement that states recover Medicaid long-term care costs from the estates of deceased recipients. This most commonly affects the family home — if it passes through probate after the Medicaid recipient's death, the state can file a claim against it to recoup what Medicaid paid. A properly structured irrevocable trust can protect the home from estate recovery.

Assets that Medicaid does not count toward the asset limit. Common exempt assets include the primary home (if the applicant plans to return or a spouse lives there), one vehicle, household furniture and personal belongings, a prepaid burial plan, term life insurance, and wedding rings. Exempt assets do not need to be spent down to qualify for Medicaid.

A Medicaid program that pays for long-term care services in a home or community setting rather than a nursing facility. HCBS waivers allow eligible seniors to receive personal care, adult day services, and other support while remaining at home or in assisted living. Each state designs its own HCBS waiver programs, and slots are limited — waitlists are common.

A life insurance or annuity policy that includes a long-term care benefit rider. Unlike traditional LTC insurance, hybrid policies pay a death benefit to heirs if the LTC benefit is never used — so the premium is never "wasted." They are often funded with a lump-sum premium and are increasingly popular for those who don't qualify for or want traditional LTC insurance.

A California Medi-Cal program that pays for in-home care services — including personal care, domestic services, and protective supervision — for eligible seniors and people with disabilities who want to remain at home. One of IHSS's unique features is that recipients can often hire a family member, including an adult child or spouse, as their paid caregiver.

The maximum monthly income a Medicaid applicant may receive and still qualify for long-term care benefits. In most states this is tied to the federal poverty level or a fixed dollar amount. Income above the limit may go toward the cost of care (as a "Share of Cost") or may require a Miller Trust / Qualified Income Trust in states with strict income caps.

A trust that, once established, cannot be changed, amended, or revoked by the person who created it (the grantor). Because the grantor gives up control of assets placed in an irrevocable trust, those assets are generally not counted toward the Medicaid asset limit — provided the trust was established before the look-back period. Irrevocable trusts are the foundation of most Medicaid asset protection strategies.

The period of time — typically 60 months (5 years) before a Medicaid application — during which Medicaid reviews all asset transfers. If assets were given away or transferred for less than fair market value during this window, Medicaid may impose a penalty period during which it will not pay for care. California uses a shorter 30-month look-back as of 2026. Planning well in advance of the look-back window is the most powerful way to protect assets legally.

A type of insurance that pays for long-term custodial care — including in-home care, assisted living, memory care, and nursing home care — that Medicare does not cover. Policies typically pay a daily or monthly benefit amount when the insured can no longer perform 2 or more ADLs. Premiums are lower and qualification is easier when purchased in your 50s or early 60s. A key alternative to spending down assets to qualify for Medicaid.

An irrevocable trust specifically designed to remove assets from a person's countable estate for Medicaid purposes. Assets transferred into a MAPT before the look-back period are protected from both the Medicaid asset limit and from estate recovery after death. The grantor gives up direct control of the assets but can often still receive income from them. Must be set up by an elder law attorney well in advance of needing care.

The minimum monthly income the at-home spouse (community spouse) is allowed to keep when the other spouse is on Medicaid in a nursing home. If the community spouse's own income falls below this amount, they may receive a portion of the institutionalized spouse's income to make up the difference. In 2026, the federal minimum MMMNA is approximately $2,555/month.

A period of Medicaid ineligibility imposed when an applicant transferred assets for less than fair market value within the look-back period. The length of the penalty period is calculated by dividing the value of the transferred assets by the average monthly private-pay nursing home rate in the state. During the penalty period, Medicaid will not pay for nursing home care.

The small monthly amount of income a Medicaid nursing home resident is allowed to keep for personal expenses — things like haircuts, clothing, or small purchases. Nearly all other income goes to the nursing home as the "Monthly Resident Cost." The PNA varies by state, ranging from as low as $30/month (Alabama) to $200/month or more in some states.

A medical order — signed by both a physician and patient — that specifies what life-sustaining treatments a seriously ill patient does or does not want. Unlike an advance directive (which is a legal document that guides treatment decisions), a POLST is an actual medical order that must be followed by emergency responders and healthcare providers. It is most appropriate for people with serious illness or advanced age.

Paying for long-term care directly out of personal savings, investments, or income — without Medicaid, Medicare, or insurance covering the cost. Private pay gives families the most choice in care facilities and services, but costs can be substantial: $5,000–$14,000+ per month depending on care type and location. Most people begin as private pay and transition to Medicaid after spending down their assets.

A trust that you create and control during your lifetime, and that you can change or revoke at any time. Assets in a revocable trust avoid probate at death and transfer immediately to beneficiaries. However, because you retain control, assets in a revocable living trust are counted as yours for Medicaid purposes — they do not help with Medicaid planning. Their primary benefit is probate avoidance and estate planning, not Medicaid protection.

A Medicaid arrangement — similar to a monthly deductible — used in some states when an applicant's income exceeds the income limit but they otherwise qualify for benefits. The applicant pays a set portion of their monthly care costs ("their share") before Medicaid pays the remainder. California uses Share of Cost for Medi-Cal long-term care applicants with income above the limit.

Medical care provided by licensed professionals — nurses, physical therapists, occupational therapists — typically following a hospitalization or injury. Medicare covers skilled nursing care for up to 100 days after a qualifying hospital stay. Skilled care is short-term and rehabilitation-focused; it is different from custodial care, which is the long-term help with daily activities that Medicare does not cover.

The process of reducing countable assets to the Medicaid asset limit so that a person qualifies for Medicaid long-term care benefits. Permissible spend-down strategies include paying off debts, making home improvements, purchasing exempt assets (like a vehicle or prepaid funeral), or transferring assets into a properly structured trust before the look-back period. Simply giving money away to family members within the look-back period is not a permissible spend-down strategy and triggers penalty periods.

Federal rules that protect the at-home spouse (community spouse) from being left destitute when the other spouse applies for Medicaid long-term care. These protections include the Community Spouse Resource Allowance (the assets the community spouse can keep) and the Minimum Monthly Maintenance Needs Allowance (a guaranteed monthly income floor). Without these protections, a couple could lose nearly everything to pay for nursing home care.