Colorado Medicaid spousal impoverishment rules protect the at-home spouse's assets and monthly income when their partner needs long-term care through Health First Colorado. Here is how those protections are calculated in 2026.
What Colorado's Spousal Impoverishment Rules Are
When one spouse applies for long-term care Medicaid coverage under Health First Colorado, the couple's combined finances are reviewed against strict limits. The concern is that without legal protections, the spouse who stays home could be forced to spend down nearly all shared assets before coverage begins. Federal Medicaid law at 42 USC § 1396r-5 prevents that outcome by shielding a defined portion of the couple's resources for the community spouse.
In Colorado, the Department of Health Care Policy and Financing (HCPF) administers these rules for nursing facility and home- and community-based waiver services. The two core protections are the Community Spouse Resource Allowance on assets and the Minimum Monthly Maintenance Needs Allowance on income.
The Community Spouse Resource Allowance in Colorado
The CSRA is the share of the couple's countable assets that the at-home spouse is permitted to keep when the other spouse applies for Medicaid long-term care.
How the CSRA is calculated. HCPF takes a snapshot of the couple's combined countable assets on the date the applicant enters a nursing facility or begins a waiver assessment. The community spouse keeps half of that total, subject to federal floors and ceilings.
- Minimum: $32,532. The at-home spouse is guaranteed at least this amount, regardless of the couple's total.
- Maximum: $162,660. The protected share is capped here even if half the couple's assets is higher.
As a practical illustration: a couple with $90,000 in countable assets would see the community spouse protected for $45,000. A couple with $20,000 would have the community spouse protected for the full $20,000 under the minimum. A couple with $500,000 would see the community spouse protected for $162,660, and the remaining balance (after the applicant's $2,000 allowed amount) would need to be spent down.
What counts and what does not. Assets the couple cannot count toward the snapshot include:
- The primary home (provided the community spouse resides there), subject to the $752,000 equity limit
- One vehicle used for the household's transportation
- Household furnishings and personal effects
- Prepaid irrevocable burial contracts
Countable assets include savings accounts, checking accounts, certificates of deposit, stocks, bonds, and most retirement accounts not yet in pay status.
The MMMNA: Income Protection for the At-Home Spouse
While the CSRA addresses assets, the MMMNA addresses monthly income. It sets the floor below which the community spouse's income cannot fall.
The 2026 MMMNA range. The federal floor is $2,643.75 per month, effective July 1, 2025, and the federal ceiling is $4,066.50 per month, effective January 1, 2026. Colorado applies these federal figures directly.
If the community spouse's own monthly income, from Social Security, pensions, and other sources, already reaches or exceeds the floor, no additional income is diverted from the Medicaid applicant. If the community spouse's income falls below $2,643.75, Colorado's rules allow a portion of the institutionalized spouse's income to be redirected to the at-home spouse to close the gap.
The shelter standard. When computing the MMMNA, HCPF factors in the community spouse's housing costs against a federal shelter standard of $793.13 per month. If actual housing costs (rent or mortgage, taxes, insurance, and utilities) exceed that threshold, the allowable MMMNA can be raised above the floor, up to the $4,066.50 ceiling.
Seeking a higher allowance. The community spouse may request a fair hearing if the standard MMMNA calculation does not cover reasonable living expenses. Documentation of actual costs strengthens that request. An elder law attorney familiar with Colorado HCPF practice can guide this process.
Colorado's Income-Cap Rule and the Income Trust
Colorado is an income-cap state. The 2026 income limit for long-term care Medicaid is $2,982 per month (300% of the federal SSI benefit rate of $994). If the applicant's gross income exceeds this cap, they cannot qualify through a spend-down process.
Instead, the applicant must establish an income trust (Colorado's term for a Qualified Income Trust, also called a Miller Trust) and submit it to HCPF. Each month, income above the cap is deposited into the trust. The trust funds are then applied toward the cost of care after allowances are paid. The document must be correctly drafted before the application can proceed.
The community spouse's own income does not count against the applicant's income cap.
Home and Exempt Assets
The primary home is not a countable asset as long as the community spouse lives in it. Colorado's 2026 home equity limit is $752,000. A home valued below that equity threshold is fully protected during the community spouse's lifetime.
Colorado's estate recovery program may seek reimbursement from the estate after the recipient's death, but federal law prohibits any recovery action while the community spouse is still living.
Other exempt assets, one vehicle, household goods, and prepaid burial plans, are not counted in either the CSRA calculation or the Medicaid asset limit.
Applying for Colorado Long-Term Care Medicaid
To start the application process, contact HCPF through one of the following:
- Online: Colorado PEAK at coloradopeak.secure.force.com
- Phone: Member Contact Center at 1-800-221-3943
- In person: A county human services office
The process includes a functional assessment (the applicant must need nursing-facility-level care) and a full financial review. Bringing organized records of assets, income, and recent financial transactions makes the review go faster.
Frequently Asked Questions
A retirement account actively paying out distributions is often treated as an income source rather than a countable asset, which may work in the couple's favor. An account that has not begun distributions is generally counted as an asset. The rules here are specific to each account type and payout status, so consult an elder law attorney before drawing down or restructuring retirement accounts.
If the community spouse's own income is below the MMMNA floor of $2,643.75, Colorado rules allow the institutionalized spouse's income to be diverted to close the gap. You do not need to take any special action to request this, but it should be confirmed during the Medicaid review.
Yes. Colorado applies a 60-month look-back to uncompensated transfers. Assets given away or sold below fair market value within five years of the application date can result in a penalty period during which Medicaid will not pay for care.
Only for applicants whose gross monthly income exceeds $2,982. If income is at or below that limit, no trust is needed. An applicant at $2,100 per month, for instance, would not need one.
HCPF is required to act on a complete Medicaid application within 45 days for non-disability-related cases and 90 days when disability must be determined. The functional assessment, required for HCBS waiver services, adds time, and there may be a waitlist for waiver services.
Get personalized help navigating Colorado Medicaid spousal impoverishment rules at brevy.com.
Learn More
- Colorado Medicaid Eligibility and Income Limits
- How to Apply for Colorado Medicaid Long-Term Care
- Medicaid Planning Strategies for Seniors
Find personalized help understanding Colorado Medicaid spousal impoverishment rules 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.