As 2026 begins, there are new guidelines issued for the Medicaid program that affect care for older adults in nursing homes or at home. There are several important Medicaid figures that changed as of Jan. 1, 2026.

The first is the Spousal Resource Allowance. This figure represents the amount of resources that the spouse of a Medicaid applicant (sometimes referred to as the “community spouse”) can keep when the applicant is approved for Medicaid. Most of a married couple’s resources are counted when determining eligibility for Medicaid. There are some exempt resources, such as the primary residence, the most valuable car and personal property. The countable resources are totaled and divided in half. The spouse who contributed to the countable resources is not relevant. However, the community spouse’s income is exempt, as is their IRA or other qualified retirement accounts.

Half of the countable resources belong to the spouse applying for Medicaid, while the other half belongs to the spouse staying at home. This amount is often called the Community Spouse Resource Allowance. There is a maximum and a minimum countable Resource Allowance that can be kept by the community spouse. In 2026, the maximum Resource Allowance is $162,660, while the minimum Resource Allowance is $32,532.

The share of the Medicaid applicant’s resources must be spent down or reduced to a very small sum in some fashion before they are eligible for Medicaid. In addition, if the community spouse’s Resource Allowance is greater than the maximum Resource Allowance, that excess must also be reduced before the applicant is eligible for Medicaid. Fortunately, there is planning that can be done to shelter the excess resources, such as spend-down techniques, or the use of spousal annuities in a married situation.

The second figure of note being updated as of Jan. 1, 2026, is the penalty divisor for long term care Medicaid benefits. To be eligible for long term care Medicaid, the applicant must disclose any transfers of resources made within five (5) years prior to the filing of the application for benefits. Depending on the amount of the uncompensated transfers, a period of ineligibility for Medicaid could be assessed against the applicant. The amount of time that the applicant is not eligible depends on the total amount of the gifts and the penalty divisor.

The new divisors for 2026 are $421.20 per day and $12,811.50 per month. Therefore, an applicant who gave away $40,000 in the five (5) years prior to application would be ineligible for about 95 days or a little over 3 months. This period of ineligibility begins at the time the applicant is otherwise eligible for Medicaid benefits.

For those interested in qualifying for Pennsylvania’s Aging Waiver Program that pays for care at home, the 2026 income limit is $2,982 for the applicant applying for benefits. The resource allowance figures and penalty divisors apply to the Waiver Program as well as Medicaid for nursing home care.

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Matthew J. Parker, Esq. is an attorney at the law firm of Marshall, Parker & Weber, LLC with offices in Williamsport, Jersey Shore and Plains. For more information visit www.paelderlaw.com or call 1-800-401-4552. If you are an attorney interested in this topic and other elder law issues, we are interested in having you join our team. Please reach out to us at the contact information listed here to learn more.