Colorado Medicaid Income Limits 2026: Eligibility & Assets

Colorado Medicaid income limits work as a hard ceiling for long-term care, so an applicant even a dollar over the line must route the excess through an income trust to qualify. That single rule, the income cap, is what makes Colorado different from a spend-down state, and it's the one most families don't see coming.

This guide walks through the 2026 income and asset rules for Health First Colorado, the state's Medicaid program, for seniors and people with disabilities who need nursing-home or in-home care. It covers the income cap, the income trust an over-income applicant must set up, the $2,000 asset limit, what a nursing-home resident keeps, and what a spouse at home is protected from.

How the Colorado Medicaid income limits work: the income cap

Health First Colorado is run by the Colorado Department of Health Care Policy and Financing (HCPF). For long-term care, the program sets a single monthly income limit of $2,982, equal to 300% of the 2026 SSI Federal Benefit Rate of $994. This number governs both nursing-facility coverage and the home-and-community-based services (HCBS) waivers that pay for care at home or in assisted living.

Here is the part that catches families off guard. Colorado is an income-cap state, not a spend-down state. In a spend-down state, income above the limit simply becomes an amount you have to incur in medical bills before coverage starts, so there's no hard ceiling. Colorado has a ceiling. If your gross monthly income is even one dollar over $2,982, you are over the limit, and you cannot buy your way under it by spending the excess on care.

What you can do instead is set up an income trust.

The Colorado income trust (Miller Trust) for over-income applicants

When an applicant's gross income exceeds the $2,982 cap, Colorado lets them qualify by establishing an income trust, the state's term for what federal law calls a Qualified Income Trust and most elder-law attorneys call a Miller Trust. The mechanism is narrow and specific:

• A trust document is drafted and a dedicated trust bank account is opened.
• Each month, the income that pushes the applicant over the cap is deposited into the trust account.
• The trust is submitted to HCPF as part of the application, and the trust funds are spent under strict rules (toward the cost of care, the personal needs allowance, and a community spouse's allowance), with the state named as remainder beneficiary up to the amount Medicaid paid.

Because every dollar above the cap has to flow through the trust each month, the trust isn't a one-time filing. It's an ongoing administrative job, and getting the deposits wrong can break eligibility for that month. Most families set one up with an elder-law attorney. The trust is the only path for an over-income applicant in Colorado; there is no spend-down alternative for long-term care.

The asset limit: $2,000 for one, $3,000 for a couple

Income is only half the test. A single long-term-care applicant in Colorado is limited to $2,000 in countable assets; a married couple with both spouses applying is limited to $3,000.

"Countable" is the load-bearing word. Colorado, like every state, exempts a long list of assets from the count: the home (subject to a federal equity cap), one vehicle, household goods and personal effects, and prepaid burial arrangements. So the $2,000 applies to things like bank accounts, a second car, and investments, not the roof over your head. The distinction between countable and exempt assets is where most legitimate planning happens, and it's worth reviewing with a professional before an application. For the broader toolkit, see our guide to Medicaid planning strategies.

The five-year look-back

Colorado reviews asset transfers made in the 60 months before a long-term-care application. Giving away money or property for less than fair market value during that window, gifting a grandchild a down payment or signing a house over to a child for a dollar, can trigger a penalty period during which Medicaid won't pay for long-term-care services, even though you're otherwise eligible.

There are legitimate exceptions (transfers between spouses, transfers to a disabled child, certain caregiver-child home transfers) and legitimate planning approaches, but anything done inside the five-year window deserves an elder-law attorney's review first. If long-term care is on the horizon for someone in your family, talk to a professional before moving assets.

Long-term care: what a nursing-home resident keeps

When Health First Colorado pays for nursing-facility care, the resident contributes almost all of their monthly income toward the cost of that care. What they keep is the Personal Needs Allowance (PNA), money reserved for the resident's own small expenses such as clothing, a haircut, or a phone. Colorado sets its PNA at $110.36/month, well above the federal floor of $30.

For a resident who used an income trust to qualify, the income flow is sequenced: the trust pays out the personal needs allowance, any community-spouse allowance, and health-insurance premiums first, with the remainder going to the facility as the resident's share of cost. (For the national picture on the PNA and how it's calculated, see our explainer on the Medicaid personal needs allowance.)

Protecting the spouse who stays home

When one spouse needs long-term care and the other remains in the community, federal spousal-impoverishment rules keep the at-home spouse from being left destitute. Colorado applies the federal maximums for 2026:

So a married couple is in a very different position from a single applicant. The community spouse can hold up to $162,660 in assets and keep over $4,000 a month in income while the other spouse receives Medicaid-funded care. These allowances also shape how an income trust is administered, since the community-spouse income allowance is one of the few things trust funds may be spent on.

After death: estate recovery

Like every state, Colorado runs a Medicaid estate-recovery program. After a recipient who was 55 or older and received long-term-care services dies, the state may seek repayment from the estate, unless the recipient is survived by a spouse or a minor, blind, or disabled child. Federal exceptions apply, and an undue-hardship waiver exists. For how estate recovery works and where families have room to plan, see our Medicaid estate recovery explainer.

How to apply in Colorado

Health First Colorado is administered by HCPF, and applications run through the counties. You have three ways to apply:

1. Online through Colorado PEAK, the state's benefits portal, which handles Medicaid, SNAP, and cash assistance together.
2. In person at your county human services office.
3. By phone through the Member Contact Center at 1-800-221-3943.

Long-term-care applicants also go through a functional (level-of-care) assessment to confirm they need nursing-facility-level services. If you expect to be over the income cap, line up the income trust early; an application can stall while the trust is being drafted and the first deposit made. Apply even if the numbers look tight, because between the income trust and the spousal protections, many people who assume they're disqualified are not.

Learn More

• Medicaid Planning Strategies
• How Medicaid Estate Recovery Works
• The Medicaid Personal Needs Allowance, Explained

Find personalized help working through Colorado Medicaid eligibility and the income trust for your family at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.